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When Is a Board a Board? When Is It Not a Board?

What we commonly refer to as a nonprofit “board” is the governing board of a nonprofit corporation. This board is charged by law with the oversight of the nonprofit organization. Board members have a fiduciary duty and risk legal liability if they fail in their duties of care, loyalty, and obedience. The legal organization and responsibility is what makes a “board” a “board.” Only the governing board has decision-making authority related to organizational strategy, budget, and the hiring of the CEO.

What we commonly refer to as a nonprofit “board” is the governing board of a nonprofit corporation. This board is charged by law with the oversight of the nonprofit organization. Board members have a fiduciary duty and risk legal liability if they fail in their duties of care, loyalty, and obedience. The legal organization and responsibility is what makes a “board” a “board.” Only the governing board has decision-making authority related to organizational strategy, budget, and the hiring of the CEO.

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A board is not a board when the nonprofit organization forms another body of people who are passionate about supporting the mission by providing business counsel and various means of service, and potentially giving and raising money. These non-governing boards are often referred to as Friends Boards, Advisory Boards, or Associate Boards; they can provide extraordinary value to nonprofits in serving regional, national, and global communities.

What this means for you is that there are a plethora of opportunities for business people of all stages–from corporate CEOs to young professionals–to engage in productive roles to advance meaningful causes.

You can contribute your expertise in a variety of ways, not just by serving on boards where you have to monitor budgets, oversee audits, and so on. Here are three examples:

1. City Year, like most national nonprofits, has only one governing board at the national level. Then there is an Advisory Board for each of its U.S. cities (20). In New York City, not only does the organization have an Advisory Board, but they also have a robust Associate Board. Itai Dinour, City Year NY‘s executive director explained the distinction to me as follows: “Our Advisory Board is comprised of local community, civic, corporate leaders who provide strategic guidance, oversee the local leadership, and connect the organization to resources. Our Associate Board is our next generation of this board where we hope to groom future Advisory Board members and help expand City Year’s reach into untapped networks/circles.”

Diana Koshel, Chair of City Year NY’s Associate Board, and Senior Business Advisor, Clifford Chance U.S. LLP, explained to me the value of Associate Boards as follows: “They can help further brand awareness by having members act as ambassadors for the organization. Participation on Associate Boards may also create lasting ties to the organization making it likely that board members will continue to promote the organization and provide long-term financial support as they advance in their careers.”

2. East River Development Alliance (ERDA), where I am honored to serve on the board, decided to form a “Friends of ERDA Board” as we approach our seventh year as an organization. With the help of BoardServeNYC, we recruited an outstanding leader, Grace Lee, senior equity analyst with Mutual of America Capital Management, to chair and build the organization’s new Friends Board. “I’ve wanted to get involved in education and economic development issues in a more meaningful way, and was looking for the right opportunity. I was very impressed with the comprehensive approach that ERDA was taking in addressing these issues in public housing and low-income neighborhoods. ERDA is clearly at a point where they’ve done tremendous work, and are now ready to scale further; this seemed like a terrific time to join their efforts. The Friends Board to help ERDA grow and have an even greater impact.”

3. The Global Fund for Women (GFW) promotes women’s economic security, health, education, and leadership. Shalini Nataraj, Vice President of Programs, described for me their organization’s Global Advisory Council. It comprises 148 formal advisors in five regions who give input to the GFW staff to help them vet 2,000 grant proposals annually. Advisors, who have regional and sector specific expertise, provide GFW with an understanding of the local context, perspective regarding the suitability of the grant applicant’s approach in the particular region, the relevance of the applicant’s work, and the caliber and credibility of the program leadership in their communities.

Daniel Lee, Executive Director, Levi Strauss Foundation is a member of the Asia Oceania Advisory Panel for GFW. He first joined in 2003, when he was the Senior Program Manager for Asia Pacific and Africa at the Levi Strauss Foundation. He told me that “GFW convened this panel–more than 25 members–in Xian, China to seek feedback on the strategic direction and regional plans of the organization. Advisory Panel members provided invaluable insight and guidance about the key issues of the day facing women’s organizations in diverse contexts such as Nepal, Afghanistan, Mongolia, and Taiwan. The discussion brought home the reality that issues such as gender-based violence and reproductive and sexual health are truly global, and that women are key players in vibrant human rights movements everywhere.”

Benefits to you for participating on these boards:

  • Develop your leadership and professional skills.
  • Learn about regional, national, or global issues that are relevant to economic development–issues such as health care, education, human rights, poverty alleviation, and environmental preservation.
  • Have an impact in helping people and strengthening your community.
  • Engage with people from diverse backgrounds and perspectives, including business people and experts in other fields.
  • Become a more qualified job candidate.

Benefits to the nonprofit that engages you on a board:

  • Gain the time and expertise of highly qualified people from diverse backgrounds and perspectives.
  • Generate new sources of financial contributions.
  • Develop new ambassadors–for the short term and the long term.
  • Build new networks of support.
  • Establish new pipelines of future board members and leaders.

Benefits to companies that encourage and support employees who participate:

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  • Provide new opportunities for your employees’ professional development and personal satisfaction.
  • Add value to nonprofits that provide greater vitality to communities where your employees and customers live and work.
  • Help employees feel good about your company.
  • Build ties with nonprofits and NGOs to leverage good will.

Here are suggestions for organizations that are establishing or enhancing Friends Boards, Associate Boards, Advisory Boards, etc.

  1. Determine the role and the purpose of the board. ERDA’s Friends Board’s purpose is “to help ERDA achieve its greater potential by developing and providing volunteer and philanthropic support for ERDA” Additionally, ERDA provides a list of five expectations of board members related to service, giving, and fundraising.
  2. Align the role of the Associate Board with the organization’s mission and strategic plan. According to Koshel at City Year NY, “It’s critical that the priorities of the Associate Board are connected to the overall mission and strategic priorities of the organization. For example, at City Year, our Associate Board members mentor volunteer corps members, which increases City Year’s retention rate, a key goal and success indicator.”
  3. Ensure that Associate Board members achieve their interests, while they are adding value to the organization. By linking Associate Board activities to organizational priorities, Koshel believes that “Associate Board members will see that they have made a positive contribution to the organization and be proud of their involvement.” Additionally, provide opportunities for Friends Board members to join governing board members at social events, as well as educational programs related to the organization, and also to support the nonprofit’s gala–perhaps at reduced rates.
  4. Identify a strong leader and build the board with well qualified candidates. Once you establish the role of the board, you can determine the specific qualifications you are looking for. All boards want people who are passionate about the mission, and who bring diverse backgrounds, perspectives, areas of experience, expertise, and networks.
  5. Consider establishing Advisory Boards that simply provide an opportunity for esteemed individuals to lend their names, provide financial support, and bring friends and colleagues to small dinner parties and/or your annual gala. Harri V. Taranto, Partner, Symphony Capital LLC, who serves on HealthRight International‘s Advisory Council told me that he appreciates the opportunity to support an organization that he believes in, without having the fiduciary responsibilities of serving on the governing board.
  6. Commit some staff time to support the board and maximize its value. It’s part of Kim Gillman’s job at City Year NY to assist the Associate Board; her job title is Individual Giving Manager. At ERDA, Jeremy Reiss, Vice President for Strategy, Organizing, and External Affairs will work with the nonprofit’s new Friends Board. At GFW, the program director for each region works with their respective Regional Advisory Panel.

There are many ways to volunteer your time and expertise, to make financial contributions, and/or to fundraise. Find an organization that you care about, understand what they need and how you can be helpful, and have a great time!

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About the author

Korngold provides strategy consulting to global corporations on sustainability, facilitating corporate-nonprofit partnerships, and training and placing hundreds of business executives on NGO/nonprofit boards for 20+ years. She provides strategy and board governance consulting to NGO/nonprofit boards, foundations, and educational and healthcare institutions. Korngold's latest book is "A Better World, Inc.: How Companies Profit by Solving Global Problems…Where Governments Cannot," published by Palgrave Macmillan for release on 1/7/14

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