Recently, several Christian Foundation Grant subscribers have expressed interest in developing advisory boards in addition to their board of directors. Although an advisory board can provide valuable assistance to an organization and its board of directors, it’s important to distinguish the differences between these boards. Here are some guidelines for advisory boards or advisory committees.
When starting a nonprofit corporation, an organization must file articles of incorporation with the state in which it resides. Filing requirements include officers of the corporation, a board of directors, bylaws, and annual meetings.
A nonprofit corporation is required by law to have a governing board, typically referred to as its board of directors. For a religious nonprofit organization, the board of directors is (or should be) the critical body that determines the entity’s programs and investments and provides management guidance.
States can vary among respective requirements of a board of directors but the general idea is there must be a board of directors that serves as the ultimate governing body of the corporation. In addition to being legally responsible for the overall management of the corporation, the governing board has the ultimate responsibility for the organization’s activities and can be a prime target when matters of liability arise. The members of the board are fiduciaries; they are legally required to treat the organization’s assets and other resources with the same degree of care that they would their own. The board also helps create the vision, mission, values, and policies for the organization and makes sure that they are properly respected. Also, financial oversight is one of the key responsibilities of a nonprofit board.
Sometimes, a board of directors will elect to set up an advisory board. An advisory board (or committee) usually functions like any committee of the board. An advisory board can provide valuable assistance to an organization and its board of directors. Distinguishing the differences between an advisory board and board of directors is important for nonprofits to help avoid problems which can occur when the lines between the two groups become blurred.
The following is a set of guidelines for developing an advisory board obtained from Best of the Board Café, Second Edition by Jan Masaoka.
1. Develop a written description of the responsibilities, activities, and limits on authority of the advisory board, and share this description with prospective members.
2. Distinguish between the role of the governing board of directors and the advisory board. For example, a board of directors hires the executive director of the organization; an advisory board may draw up a suggested list of qualifications for the person or people hiring the executive director. A board of directors can direct staff to take certain actions; an advisory board can suggest actions to staff and can be angry if its suggestions aren't taken, but an advisory board can't compel staff to act. An easy way to communicate this distinction is not to use the term "board" for the advisory group; instead use "committee" or "council."
3. Consider asking a community leader to chair the advisory committee and act as a spokesperson for the organization in the community. Alternatively, have a board member lead the advisory committee.
4. If the main purpose of the advisory board is fundraising, consider a different name such as "Friends of X" or "Community Leadership Council." If you don't have volunteer leaders who will take responsibility for organizing and driving this group, delay creating it until you have found such leaders.
5. Don't establish an advisory board if you cannot commit the time and thought to getting results from the group, and to making the experience meaningful and rewarding for members. Too many organizations have erred by creating advisory boards where members felt ignored, or as if they were being asked for donations in the disguise of being asked to advise.
6. Don't be afraid to disband an advisory board that isn't achieving what it was established to accomplish. Consider instead asking members to be "Advisors" or a "Council of Advisors," both terms that give a mutual sense of affiliation without implying group meetings.
--Jackie Jones is the Marketing and Communications Director of Christian Foundation Grants. She may be reached at jjones@christianfoundationgrants.com.