Hallmarks of a Risk-Aware Nonprofit

Hallmark #11: Engages the Board in Their Battle

The Challenge

Nonprofits that engage the board in their common battle have more armor than boards that do not. Boards can provide resources and connections and leverage relationships in ways that staff alone cannot. Boards can also challenge assumptions and ask questions that others had not thought to ask. The more the board knows about the nonprofit’s programs, activities, finances, operating environment and competition, the more the board can offer as risk managers for the nonprofit.

Nonprofits that engage the board in battle also benefit from boards that are more engaged and more committed to serving the best interests of the nonprofit.

The Process

To demonstrate that your nonprofit engages its board in the battle, your nonprofit will:

  1. Include a component on risk-management in its new board member orientation program.
  2. Regularly educate the board about the nonprofit’s services, programs, activities, finances, insurance program and competition.
  3. Provide the board with timely and up to date financial statements well in advance of meetings and frequently enough so that the board’s decisions are based on accurate financial picture of the organization.
  4. Encourage the board to review the 990 prior to its being filed with the IRS, and provide the board with resources so that they can consider adopting or updating governance policies that are the subject of specific questions in Part VI of the IRS Form 990 such as a conflict of interest policy, whistleblower protection policy, document retention policy, joint venture/partnership agreement review policy, and executive compensation policy -- as well as a gift agreement policy for non-standard gifts. (See the Tools section of the Hallmark for information on sample policies.)
  5. Identify and sponsor appropriate resources for your nonprofit for board training on roles and responsibilities of nonprofit board membership