A common issue for many in the nonprofit world is management — who’s responsible for what? How is it balanced and accounted for?
In many cases, management is right alongside volunteers with their sleeves rolled up and getting things done. Passion and purpose are the fuel moving the nonprofit forward.
However, your nonprofit needs a strategy in order to be sustainable and achieve true impact in the long term. This is where boards come in.
This article takes a dive into the differences between an advisory and a governance board, their roles and responsibilities, and how each helps your nonprofit achieve its intended objective.
What is an Advisory Board?
An advisory board is a board of experts who gather to give strategic advice on specific topics.
Not only nonprofits have advisory boards. Startups, multinationals, and even academic institutions have advisory boards.
An advisory board is a prime opportunity for organizations to benefit from external advisors’ expertise in their respective fields. For example, a nonprofit could have an advisory board to support a leadership transition, devise a marketing or outreach strategy, or manage a crisis.
Other commonly used names for an advisory board include advisory team or committee, project board, or board of advisors.
Advisory Board Roles and Responsibilities
The main purpose of an advisory board is to provide advice. Advisory boards are formed by professionals and others with expertise, outside the organization who join forces to provide their insights and help the nonprofit achieve a goal.
The most effective advisory boards are formed with specific objectives in mind. Nonprofit leadership can form an advisory board to manage a specific situation and dissolve it once the objective has been achieved.
Some common objectives include fundraising, navigating a transition, managing a crisis, increasing reach, and recruiting staff or volunteers.
It’s essential to remember that the advisory board has no authority to vote on final decisions. They can only share their expertise and guidance. Also, the board of directors, owners or shareholders are not obligated to take this advice.
Furthermore, a single nonprofit may have multiple advisory boards
How to Create an Advisory Board
The most important factor when creating an advisory board is to identify a clear need. The scope of an advisory board is very specific, so you want to be clear on the purpose of forming it.
With a clear objective in mind, it’s time to select your board members. You can choose from current volunteers or staff members or recruit new volunteers specifically for the advisory board. Regardless of which route you go, they’ll need to be subject matter experts.
While there’s no fixed layout of what your advisory board should look like, these are the standard participants in an advisory board:
Chair
The chairperson leads the board and facilitates board meetings. They can be appointed by the nonprofit’s leadership or selected by the board members.
Vice-chair
The vice-chair is a substitute for the chair in case they’re absent.
External advisors
These are experts selected by the nonprofit to provide guidance and advice.
Internal stakeholders
Often from the executive or leadership team, these stakeholders represent the nonprofit in front of the advisory board. Internal stakeholders are ultimately responsible for making decisions and implementing what’s discussed by the board.
In general, people who take part in an advisory board for a nonprofit do so voluntarily and without compensation.
Once you have a team, it’s time to add some structure. Select a leader (or chairperson) and a vice-chair, assign everyone a task, and set goals and a meeting schedule.
With that, it’s time to get into action.
What is a Governance Board?
On the flip side of an advisory board, whose role is solely advising and not making any final decisions, we have a governance board.
Unlike advisory boards, governance boards do have a say in operations. A governance board is one with the authority to provide strategic direction and planning for the nonprofit. Beware, though: A governance board is not actually executing. Their role is to lay out the strategic plan for the nonprofit to implement.
Governance Board Roles and Responsibilities
The easiest way to think of a governance board is that it’s a step above management. They devise the strategy and steps for the nonprofit to take — and then step back.
A governance board has a say in matters like budgets, fundraising, and program development.
Typically, you’ll find the following titles in a governance board:
A chairperson or president
The president of the board is in charge of keeping the board in line with the organization’s objectives.
A treasurer
The treasurer is responsible for the financial matters in the organization.
A secretary
The secretary makes sure things are running smoothly by handling administrative tasks like meeting agendas and filing documentation.
How to Create a Governance Board
There are no set rules on how to recruit people for your governance board. But you’ll need to evaluate whether they’re a good fit for your nonprofit’s culture and if they’re passionate and ready to serve your mission.
Next, you’ll want to assess their qualifications. Industry experts like professors and researchers are often a top choice.
And finally, decide whether you’ll hire someone internally or externally to support the board. One possible con of assigning a board position to an existing staff member is that they may take more responsibility than they could realistically handle. Similarly, the fact that they’re a paid staff member may create a conflict of interest — and it could be against the law depending on where you are and what your nonprofit does.
To find a good external fit, start by considering engaged volunteers and other members of the community. You can also do some research on pages like LinkedIn and local networking groups.
Final Words: Do You Need an Advisory Board or a Governance Board?
The answer is: It depends. As you see, advisory boards and governance boards have very different functions.
If your nonprofit is in need of strategic advice regarding a specific issue, an advisory board is the way to go. On the contrary, if what you need is overall strategy and planning, a governance board will be better equipped to serve the nonprofit.
Also, don’t forget to check state and federal requirements and your nonprofit bylaws to help you determine what type of board is required to stay in compliance. nonprofit.
Book a consultation now to find out how both boards can work together to ensure your nonprofit can have the positive impact you’ve set out to achieve.
