Effective Non-Profit Boards

BOARD OF DIRECTOR TRAINING

Agenda
2

ROLE OF THE BOARD BOARD GOVERNANCE GRANT OVERSIGHT AND ACCOUNTABILITY FINANCIAL OVERSIGHT AND PLANNING POLICY DEVELOPMENT AREAS FOR FURTHER EXPLORATION
Catapult Strategic Consulting, LLC

September 2012

Board Member Roles and Responsibilities

THE PLAYERS AND THEIR PARTS

Who is at the Board Table?

4

Directors
Officers CEO and Staff

Catapult Strategic Consulting, LLC

September 2012

Board Member Obligations

5

Duty of Care

Use your best judgment in all dealings

Duty of Loyalty

Be faithful and avoid conflicts of interest

Duty of Obedience

Stay true to the organizations mission and applicable laws

Catapult Strategic Consulting, LLC

September 2012

Top 10 Roles of the Board

6

1. Establish organizations mission and purpose 2. Select the Executive Director 3. Support and evaluate the Executive Director 4. Ensure effective planning 5. Monitor and strengthen programs and services 6. Ensure adequate financial resources 7. Protect assets and provide financial oversight 8. Build a competent board 9. Ensure legal and ethical integrity 10. Enhance the organizations public standing
Catapult Strategic Consulting, LLC

September 2012

Board Officers
7

Chair

Provides leadership to board Runs meetings Interacts closely with CEO Coordinates financial oversight Chairs the finance committee Keeps records for the board Takes minutes of board meetings

Treasurer

Secretary

Catapult Strategic Consulting, LLC

September 2012

Role of CEO
8

Ex-Officio Member of Board Board Administration & Support Program and Service Delivery Financial, Tax, Risk & Facilities Management Human Resources Management Communications & Public Relations Fundraising

Catapult Strategic Consulting, LLC

September 2012

Who is Responsible?
9

For each item below, identify the group you think should handle the task. Do you think the task is the responsibility of the directors, the officers or the CEO and staff?

Grant Writing Board Member

Recruitment Fundraiser Details Grant Quarterly Reports Annual Operating Budget Long Term Planning Volunteer Management

Center Curriculum Staff Performance

Reviews Fundraising Risk Management Update Mission Statement Donor Recognition

Catapult Strategic Consulting, LLC

September 2012

Board Governance
HOW YOU DO WHAT YOU DO

Board Governance
11

Documentation
Decision Making Strategic Planning

Catapult Strategic Consulting, LLC

September 2012

Purpose of Governance Documents

12

Specify Entitys Purpose Define Legal Rights and Limits Prevent Misunderstandings Guide Decision-Making Provide Flexibility Record Activities Manage Risk Maintain Non-Profit Status

Catapult Strategic Consulting, LLC

September 2012

Organizational Documents
13

Articles of Incorporation
Application for Tax Exempt Status Determination Letter

Catapult Strategic Consulting, LLC

September 2012

By-Laws
14

Organization Name and Purpose Membership, if any Number, Term, Election and Removal of Board Members Board Member Powers and Compensation Meetings and Quorum Designated Officers and their Duties Board Committees Board Member Restrictions Contracts, Checks, Deposits and Funds Amendments
Catapult Strategic Consulting, LLC

September 2012

Reporting Documents
15

Board Manual
Meeting Minutes Form 990 Lobbying Activity Compensation Substantiation

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September 2012

Decision Making Process

16

Board Member

Board Committee

Proposal/ Motion

Discussion

Decision

CEO

Catapult Strategic Consulting, LLC

September 2012

Keys to Effective Decision-Making

17

Stick to Strategic Priorities

Define Problems and their Significance Establish Criteria for Evaluating Alternatives

Distribute Important Information Before Meetings

Communicate, Communicate, Communicate

Catapult Strategic Consulting, LLC

September 2012

Strategic Planning
18

Update and clarify your mission

Identify the ideal future Define coordinated activities Give direction to board and staff Quantify necessary resources Detect areas of greatest risk

Catapult Strategic Consulting, LLC

September 2012

Strategic Plan Components

19

Mission Vision

Why we are here What the world will look like when we have accomplished our mission Our strengths, weaknesses, opportunities and threats The key areas we will address now to achieve our mission and vision, while utilizing our strengths, compensating for our weaknesses, taking advantage of opportunities and protecting against threats Broad statements of what we will accomplish during the planning period Specific and measurable steps to attain our identified goals Who is responsible for accomplishing objectives and goals of the plan; includes deadlines and budgets

SWOT
Priorities

Goals Objectives Action Plans

Catapult Strategic Consulting, LLC

September 2012

Secrets to Successful Business Planning

20

Senior Leadership Supports Involves Members of all Stakeholder Groups Considers Best Practices of Others Innovation is Valued Staff By-In Communication, Communication, Communication

If you don't know where you are going, you will wind up somewhere else.

-Yogi Bera

Catapult Strategic Consulting, LLC

September 2012

Grant Oversight & Accountability

PROGRAM FUNDS, BUDGETS AND CONTRACTS

Characteristics of Program Funds

22

Restricted Contributions
Only Pay for Specific Business Costs Spent During Specific Time Frames Limited, if Any, Use for Overhead Contractual

Catapult Strategic Consulting, LLC

September 2012

Board Responsibilities re: Programs

23

Ensure program funds are only spent on program

activities Measure and monitor program progress and effectiveness Make changes as necessary Report to funding sources (i.e., government) how money was spent and outcomes Meet legal requirements outlined in grants Ensure continued funding
September 2012

Catapult Strategic Consulting, LLC

Classification of Revenue
24

Unrestricted Revenue Temporarily Restricted Revenue Permanently Restricted Revenue

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September 2012

Program Budgets
25

Financial
Activities Outcomes

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September 2012

Financial Budgeting
26

Grant Receipts
Other Program Income $ spent Direct Program Expenses

Overhead Allocation

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September 2012

Activity Budgeting
27

Staff Hours
Volunteer Hours Clients contacted Classes Taught

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September 2012

Tracking Outcomes
28

Clients served
Skills Learned Placements Made Client Satisfaction

Catapult Strategic Consulting, LLC

September 2012

Contract Compliance
29

Grant is a Legal Contract

Obligations Outlined in Contract Documents Document How Program Funds Spent Demonstrate How Programs Goals Achieved Regular Reporting Intervals Keep Program/Contract Officer Informed

Catapult Strategic Consulting, LLC

September 2012

Compliance Program Elements

30

Authorization
Independence Transparency

Documentation
Reporting Guidelines

Internal Controls
Regulations
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September 2012

Common Noncompliance Issues

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Sufficient Program Documentation

Travel Documentation Cost-Sharing Records Retention Separation Financial Administration for Each Award Violation of Institutional Conflict of Interest Rules Subgrantee Monitoring Residual Funds accounting and disposition
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September 2012

Risks of Noncompliance
32

Administrative Sanctions
Reductions in Payments Termination of Grant Suspension Corrective Action Plans Fines or Penalties Damage to Reputation

Catapult Strategic Consulting, LLC

September 2012

Financial Oversight & Planning

LINKING MONEY & MISSION

Leadership Obligations
34

Understand Service Delivery Model

Know Fully-Loaded Cost of Providing Services Communicate Your Financial Story to Stakeholders

Catapult Strategic Consulting, LLC

September 2012

Financial Documents
35

Financial Statements o Statement of Activities (aka Income Statement) o Balance Sheet

Audits

IRS Form 990

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September 2012

Financial Statement Interpretation

36

Statement of Activities Records all revenue received, expenses incurred, and changes in net assets during a particular period of time (i.e., month, quarter, year)
Balance sheet Shows the assets, financial resources, debts, and other liabilities at any given moment in time (i.e., end of fiscal year)

Catapult Strategic Consulting, LLC

September 2012

Scarce Resources
37

Cash Personnel Time Space Supplies Donations

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September 2012

Allocating Resources
38

Grant Obligations
Cost/Benefit Industry Standards Watch Dog Groups

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September 2012

Forecasting Considerations
39

Strategic Plan Driven

Involve All Programs Include Contingency Plans

Cash is King
Account for Restricted Funds Research Material Assumptions

Roll for 12 Months or 4 Quarters

Require Board Approval
Catapult Strategic Consulting, LLC

September 2012

Day 1 Review
40

Board Member Roles Directors Officers Staff

Accountability

Program Funds Budget & Management Compliance

Governance By-Laws Decision Making Strategic Planning

Grant Oversight &
Catapult Strategic Consulting, LLC

Financial Oversight &

Planning

Financial Statements Resource Allocation Forecasting

September 2012

Questions & Answers

WHATS ON YOUR MIND?

King Edwards Incorporated

BOARD OF DIRECTORS TRAINING

Policy Development
MOVING THE ORGANIZATION FORWARD

Board Resolutions
44

Formal Documents
Solidify and Document Board Decisions Typically Address Financial Matters Implementation of Policy Adoption, Approval or Authorization of Actions being taken by Organization

Catapult Strategic Consulting, LLC

September 2012

Board Meeting Minutes

45

Document key information and important decisions

Record board actions, elections and committee and

staff reports Legal record of board discussions and decisions

Catapult Strategic Consulting, LLC

September 2012

Content of Meeting Minutes

46

Date and Time of Meeting

Whether meeting is regular or special meeting Whether notice was given or waiver of notice was

signed by all directors Names of directors in attendance and directors not in attendance Names of attending guests and their titles Whether a quorum was established An departures and re-entries of attendees Any board actions taken
September 2012

Catapult Strategic Consulting, LLC

Great Minutes
47

Include alternatives considered for important

decisions Attach and/or briefly summarize committee reports Record when requirements of vote (i.e., majority) are reached Record recusals from discussions and abstentions from voting Include votes against motions Include action items
September 2012

Catapult Strategic Consulting, LLC

Areas for Further Exploration

BOARD BEST PRACTICES

Role of the Board of Directors

49

Role is Clear and Distinct from Staff Board has Governance Focus Members Understand their Roles

Catapult Strategic Consulting, LLC

September 2012

CEO is the Agent of the Board

50

Board of Directors

CEO

Staff

Catapult Strategic Consulting, LLC

September 2012

Well-Informed Board
51

Job Descriptions
Board Handbooks Board Orientations Continuing Education Opportunities Regular and Honest Evaluations

Catapult Strategic Consulting, LLC

September 2012

Recruit Strategically
52

Demographic Diversity
Professional Experience Leadership Qualities Community Connections Past Board Experience Capacity to Give

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September 2012

High Functioning Board Committees

53

Clearly defined areas of responsibility

Cut across all organizational functions not

program silos Chaired by board member Includes non board members Senior staff member provides support

Catapult Strategic Consulting, LLC

September 2012

Suggested Committee Structure

54

Limit Standing Committees Use Ad Hoc Committees as Necessary

Governance
Ad Hoc Ad Hoc

External Relations

Board of Directors

Planning & Program Development

Ad Hoc

Ad Hoc

Performance Oversight

Catapult Strategic Consulting, LLC

September 2012

Board Leadership in a Nutshell

55

Where should the organization be headed in the

long run? Where is the organization now? How well is the organization performing programmatically, financially and administratively?

Catapult Strategic Consulting, LLC

September 2012