The quality of governance can have an enormous impact on the ability of nonprofit organizations to carry out their objectives. It is crucial that boards have clear policies, frameworks, systems and structures in place. This will enable them to operate at their highest level.
As the need for a strong governance in the nonprofit sector grows, so is the importance of choosing a model of governance that will meet your specific needs and goals. There isn’t a one-size-fits all governance model. However, as nonprofits grow and learn the benefits of different models, they typically opt for a hybrid model.
Some examples of governance models include the cooperative model which distributes power evenly among board members as well as the patron governance model that is used in nonprofits that concentrate on fundraising and relies heavily on the generosity of wealthy individuals and the management team model which acts like a for-profit business with committees responsible for human resources, finances and fundraising, public relations and more. The board can also opt to create an advisory board in addition to their executive board. Advisory boards are composed of experts who contribute their expertise and skills to the organization. They often help improve its fundraising and public relations efforts and improve its image.
In the Advisory Board Model non-profit board members are consultants to the CEO and do not make decisions independently. In this situation, nonprofit board members are usually paid a salary for their services, but in some instances the position isn’t compensated and the CEO does all the decision making. In any situation it is crucial to establish a strict conflict board room of interests policy to ensure that any possible conflicts can be identified and handled.