Does Your Board Get the Nonprofit Model?

It’s a familiar story. The board decides to look ahead a decade so the executive director of the agency arranges a board strategic planning retreat.

The facilitator begins the exercise in earnest, assuming that all board members understand and are prepared to act on the realities of nonprofit finance and management, and that they grasp the impact of those realities on this agency.

Then the meeting blows up or is at best sidetracked because some members don’t understand the differences between their commercial business—large or small—and the realities of running a nonprofit agency. At best, this becomes a learning opportunity. At worst, ultimatums are expressed and some go home angry.

What not to do? Don’t begin a planning session without carefully addressing nonprofit realities at or just before the meeting.

I find it helpful to use a Q&A summary of Clara Miller’s article, “The Looking-Glass World of Nonprofit Money,” from the spring 2005 edition of The Nonprofit Quarterly.

She carefully and forcefully explains the ways nonprofits fund accounting, contracting entities, certification, licensing, subsidizing businesses, philanthropy, and more make us different from the supermarket, department store or professional service corporation. Let your board discuss how these concepts apply to your agency. Be prepared to review specific examples to make it real.

When board members understand the nonprofit dynamic, they can unite and engage the community to propel the agency into the future. That is foundational for good planning, agency success, and maximizing community benefit.