Making Your Nonprofit Mission Work—Start Fresh or Collaborate, Part 2

The Board of Directors

Many small nonprofits start with a family forming the core of the board of directors; there may also be family members delivering the services. This can result in a significant conflict of interest and should be avoided. If your organization did start this way, make it a goal to evolve to a best-practices model where relatives are not sitting on the same board. BoardSource is a tremendous resource for all things nonprofit board of directors; it is a membership service, but does offer some resources for free.

"Robert’s Rules of Order Newly Revised" is the go-to reference material for boards, but be careful, reading it has also been known to have sedative effects! Additionally, make sure the structure of the board of directors is addressed in your organizational bylaws.

The biggest things to understand and adhere to are the three main categories of a board member’s responsibilities: Duty of Care (exercise reasonable care in decision-making), Duty of Loyalty (undivided allegiance) and Duty of Obedience (not acting in a way that is inconsistent with the central goals of the organization). Full definitions can be found here.

How Will You Operate & Fund Your Mission?

Many individuals or small groups that have taken the step of starting a nonprofit organization face challenges for which they were not fully prepared. They incorporated, loosely formed a board of directors, and then depleted their personal resources trying to deliver programs or services. It can be difficult and frustrating for the founders to learn that there are many additional steps necessary for their organizations to become successful.

Here are a few areas you should address, in addition to the mission-related items described above, before forming an organization:

1. What IRS, federal, and state laws must the organization follow? Did you know that 41 states require nonprofits to register in order to be allowed to solicit funds? This map from Harbor Compliance can help you find out what your state requires. (There are also out-of-state solicitation registrations required).
2. Would you qualify as a 501(c)(3), or would you be a trade association or a lobbying group? Check the list of 501 statuses here.
3. Do you need any mission-specific licenses or certifications to be authorized to operate?
4. How will you recruit and train board members?
5. What skills are needed on the board?
6. Will you have paid staff or be all-volunteer?
7. How will mission delivery be funded?
8. What financial controls, conflict of interest and ethics policies should you have in place?
9. Have you created a strategic plan or a business plan?
10. What amount or level of services do you plan to be able to deliver in the first year?
11. What technology do you need to have in place to accomplish all of these things?
12. Have you created a budget that includes everything from technology to Directors & Officers insurance, to facilities, to fundraising costs?

Susie Bowie urges anyone considering starting a new nonprofit to do the following:

“Research other local and national approaches, have a viable plan to recruit strong leaders for your board of directors who are prepared to offer viewpoints that may differ from your own and develop diverse sources of revenue to sustain the organization’s work. New organizations are rarely funded entirely (or partially) by grants.” 

When starting or running a nonprofit organization, passion and dedication are only two pieces of an intricate puzzle. While you must be willing to give of yourself to make the mission possible, how you build your team and structure gives you the best chance of mission success. What that success looks like can take many forms; do a bit of research in the areas you care about, and I know you’ll find many avenues to take that will allow you to help make the world a better place.

Click here to read part 1.