Upon first consideration, you may think that the workhorses of a nonprofit organization are the board members. In reality, that’s only partially accurate. Best practices for nonprofit boards indicate that every board member should serve on a board committee. The heavy work that nonprofits do actually occurs by board members in their capacity as board committee members.
To better understand nonprofit board committees, it helps to understand the differences between the role of the board and the role of board committees. The primary role of all boards is strategic planning and oversight. In the nonprofit realm, boards of directors also dedicate much time to fundraising efforts, as fundraising supports the nonprofit’s long-term sustainability.
Because nonprofit board directors generously volunteer their time and efforts for a worthy cause and because donors expect their funds to be used wisely, nonprofit boards must work as efficiently as possible. Board committees support the organizational structure of nonprofit organizations. The work of committees allows nonprofit boards to be flexible and to respond more quickly to urgent or complex situations.
The structures of nonprofit boards, their committees and a board portal system provide all of the necessary components for nonprofits to perform efficiently and successfully.
Benefits of Board Committees
Nonprofits have much to gain by setting up board committees. The keys to maximizing the benefits of board committee work are to develop the right committees at the right time and to appoint the right people for the right purpose.
Board committees provide an opportunity to tap the talents and abilities of individual members. Serving on a board committee gives individual members the chance to be active and involved. Nonprofit board and board committee service are great ways to enhance their resumes.
As a benefit to the board, committees parcel out the work into manageable tasks so that board directors can focus their meetings on routine board issues and issues that demand a larger scope.
What Are Board Committees?
Board committees are small groups of individuals that work together on a targeted topic or issue. Nonprofit boards may appoint some combination of board directors, experts, volunteers or community members to a board committee. Nonprofit board committees fall into two categories.
Standing committees are permanent committees that work on a specific issue all year long. Standing committees make regular reports to the board. Executive committees, finance committees, and nominating and governance committees are examples of some common standing committees.
The other type of committee is an ad hoc committee. An ad hoc committee is a short-term task force or working group that boards organize for a specific purpose. Similar to standing committees, ad hoc committees are composed of board members and others. Ad hoc committees meet for a limited duration. When their work is completed, they make their recommendations to the board and then disband.
How Do Board Committees Work Best?
Nonprofit board committees research issues that are too time-consuming for board directors to spend time on during regular board meetings. Committee members gather reports to support their findings and make recommendations to the board.
A board portal is a tool that greatly enhances the work of boards and board committees. Diligent Boards provides a secure platform for board and committee work, complete with granular user permissions so that board and committee members can only access the parts of the board they need. Diligent’s governance software solutions are fully integrated for enhanced security and efficiency. Nonprofit boards and committees can use the same platform for their work. Diligent Messenger is a highly secure communications platform that prevents cybersecurity issues that can result from using personal and business email accounts.
A board portal enhances the work of boards and committees, as it increases their accuracy and efficiency. Donors and grant-makers will surely take notice of a nonprofit organization’s commitment to using a board portal that enhances good corporate governance.
Structure of a Nonprofit Committee
Board committees for nonprofit companies are structured much like board committees for public and private companies. Boards write up a charter for their committees that outlines the committee’s duties, responsibilities and timeline. The charter also describes the composition of the committee, the frequency of committee meetings and the limits of authority.
Examples of Nonprofit Board Committees
A common type of board committee is an executive committee, which is usually composed of the board’s officers. Executive boards of nonprofit organizations usually act as steering committees that plan and prioritize the board’s agenda and work. The nonprofit’s bylaws will outline the function of the executive committee. In larger nonprofits, boards may give executive committees some degree of power and authority.
Nonprofit boards must raise enough funds through fundraising, grants and membership fees to keep their organizations sustainable. Thus, nonprofits dedicate vast amounts of time and energy to fundraising. Because of the large amount of time needed to set fundraising goals, set up events and campaigns, collect membership fees and apply for grants, most nonprofits find that it’s practical to set up a fundraising committee as a standing committee.
It’s vital for nonprofit organizations to keep their finances in good order. Potential donors nearly always ask to see a nonprofit’s accounting records before they agree to make large donations. A finance committee is often also a standing committee. The board treasurer is the best person to chair the finance committee. The chair leads the committee in the creation of a budget, monitoring and reporting on the organization’s financial status and ensuring that the organization complies with all financial laws, policies and practices.
Nominating and Governance Committee
Nonprofit boards often set specified terms for their board members. They may also limit the number of terms they’re able to serve. Since the board turns over periodically, it’s important for boards to actively participate in succession planning. Also, usually a standing committee, the nominating and governance committee is responsible for recruiting and nominating potential board members to fill the vacancies of board directors who leave. Nominating and governance committees are also responsible for providing a board director with an orientation and continuing education. In the role of strengthening board effectiveness, this committee often takes the lead in performing annual board self-evaluations.
Boards may also set up standing or ad hoc committees for marketing, communications, outreach, membership, strategic planning or any other need they have.
Standing board committees and ad hoc board committees are staples of nonprofit organizations. Software solutions that support good corporate governance, such as Governance Cloud by Diligent, substantially enhance the work of boards and their committees by greatly increasing their efficiency.