Five Models of NonProfit Governance
Creating, directing, and operating a nonprofit organization is a complex task in today’s world. Between resource constraints, fundraising requirements, legal restrictions, and, of course, the needs of the beneficiaries, great demands are placed on the teams tasked with governing the nonprofit.
This is why selecting a governance model for the organization’s board is, in itself, a complex yet crucial task, as it needs to align goals, needs, and modes of work, for both short and long-term efficiency and effectiveness.
Governance refers to a combination of policies, systems, and structures, placed in an operational framework. This enables organizational leadership to take action so that they can make effective and accountable decisions.
A model for governance outlines how those policies, systems, structures, and frameworks interface and interact, and also who is responsible for them.
Based on this resource shared with us by Global Trust Partners, this article aims to outline and explain Five Models for Nonprofit Board Governance, answering key questions about the role of the board and the responsibilities of the staff in different types of organizations. Thus, with clearly defined goals, roles, and modes of action, confusion can be eliminated, conflicts can be avoided, and the organization can flourish and achieve its true potential.
Here are the FIVE MODELS FOR NONPROFIT BOARD GOVERNANCE proposed by Global Trust Partners:
Board as Staff
Board as Managers
Board as Directors
Board as Governors
Board as Advisors
Before diving into each of the Five Models, it is important to point out two key aspects:
(1) The Models can be used in combination if the organizational needs require multiple types of Governance Boards (for instance, an Advisory Board and a Management Board);
(2) As organizations move through the various stages of their evolution, their governance model may need to shift to stay relevant.
1. bOARD AS STAFF
In this Model, the Board spends most of its time doing the actual work of the organization, performing the various operational tasks needed to maintain its functions.
The Board is in charge of everything, from determining the organization’s reason to exist and its goals and objectives, hiring and training staff, setting up and implementing strategies, plans and budgets, and reporting activity to other stakeholders. Therefore, both long-term and short-term, day-to-day responsibility and legal accountability for the organization’s continued existence and function rests with the Board.
This highly cooperative, highly involved Governance Model is frequently found in smaller, newer nonprofits that do not (yet) have the resources to hire specialized staff for all their operational needs. So, they must rely on Board Members to fill in at least some of those roles. As the organization grows and handling both strategic and operational responsibilities becomes too complex, the Governance Model must also change to facilitate this growth.
2. BOARD AS MANAGERS
This Model shifts the Board member’s roles away from direct execution, towards supervision and coordination. Their strategic responsibility of setting out organizational mission, goals, and objectives, developing strategies, plans, and budgets, as well as holding legal accountability for the organization’s work remain in place, and they are still intimately involved with daily operations and decisions. However, their responsibilities lie less in doing and more in making sure that things get done, thus delegating jobs such as hiring and training staff and volunteers, operational purchases, serving clients and beneficiaries, etc.
As with the Board as Staff Model, the Board as Managers Model requires close and seamless cooperation between Members. While we can interpret this Model as the next step “up” from the Board as Staff one, as it implies that the organization can hire and train specialized staff to handle most day-to-day tasks, there are no rules mandating every organization to move from one model to the next one in this order, or any order. For some organizations, a highly specialized, highly involved Board with members that cooperate very well means that they can maintain their Board as Managers indefinitely. For others, it may not be a choice at all.
PHOTO CREDIT: UNION FOUNDATION
3. BOARD AS DIRECTORS
We are moving away from the previous Models that involved Board Members in the organization’s operations. The Board as Directors Model sets out Members’ responsibilities as purely strategic: they decide the organization’s mission, establish goals and set out objectives, evaluate progress, and ensure legal compliance. In other words, they direct the organization’s work but do not manage, nor implement it.
This Model relies on the existence of a management and operational team separate from the Board, led by a CEO that holds authority over planning and execution. The Board’s directive role also means that the members must have the experience and expertise required to provide strategic guidance, towards a long-term vision for the organization.
4. BOARD AS GOVERNORS
Moving further away from the organization’s operations, this Model sets out a visionary role for the Board: setting out the organization’s main mission and ensuring it complies with the legal (and ethical) framework within which it operates. Everything else, from goals to plans, to execution and reporting, lies with other teams within the organization.
This Model is usually found among big, established, well-known organizations, usually with a longer tradition and/or a wide-ranging vision, or among nonprofit foundations founded and funded by big corporations or wealthy individuals.
PHOTO CREDIT: HOMEOPATHY RESEARCH INSTITUTE
5. BOARD AS ADVISORS
The fifth and final Model proposed in this article is also the one that requires the least involvement from Members in the actual functioning of the organization. That does not mean that Board Members do not work for the benefit of the organization, just that their responsibilities are to affirm, endorse, and advise it. As such, they adhere to an existing organizational vision and mission (not set up by them) and proceed to use their own influence to promote the organization’s work.
This table summarizes the Five Models:
So, what model of governance does TrustBridge use?
TrustBridge adopts a Board as Governors Model, relying on Board members for ethical guidance and vision while allowing the management team to handle strategy and general operations. This model has proven very successful for TrustBridge, and as such we encourage our own Network Members to move towards this model while acknowledging the fact that the needs and resources depend on the specific stage of growth each organization finds itself in.
Additionally, at TrustBridge, we acknowledge that each nonprofit charity is unique, and our vision is to see you have everything needed to accomplish your mission. If you find board governance challenging, we hope this resource has proven helpful! Learn more about the solutions offered by TrustBridge to expand global giving by contacting us.
We are grateful to Global Trust Partners for sharing this resource with us and permitting its publication. Find out more about their mission and work at www.gtp.org.