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Suspect that the U.S. is home to a great many nonprofit organizations? You don't know how right you are. As of April 2016, the Nonprofit Center for Charitable Statistics reported that there are 1,571,056 tax-exempt organizations, including 1,097,689 public charities; 105,030 private foundations; and 368,337 other types of nonprofit organizations (nccs. urban.org/index.cfm). In 2010, nonprofits accounted for 9.2% of all wages and salaries paid in the U.S., and in 2014, the nonprofit share of the Gross Domestic Product (GDP) was 5.3%.
Nonprofits are important in the aggregate, but what does this mean on a more local-and personal-level? When we attend school, enjoy leisure activities or cultural enrichment, worship, receive medical services, or do volunteer or even paid work, in most-if not all-of these instances, we're interacting with nonprofit organizations. It's hardly surprising, then, that we're inclined to say "Yes" when we're invited to join the board of a nonprofit-even before we know exactly what serving on a board will actually entail. What is this thing they call "governance" or "leadership"?
Many nonprofits ask themselves the same question. The reasons for asking vary, but typically involve people, personalities, and financial resources (or the lack thereof). In one scenario, the board has relied on the leadership of an effective and charismatic founding executive director who is now preparing to retire. In another organization, the executive director and the board chair have competing ideas about what leadership should look like. Social or economic changes that pressure the organization to raise more money, change direction, or perhaps even close its doors present challenges that the board and executive director feel ill-equipped to address.
To ensure the legal, ethical, and financial health of the organization, the nonprofit executive director, board chair, and board members must engage with a range of often complex issues, including these:
* Establishing or clarifying the organization's mission, vision, and values
* Formulating a sound strategic plan
* Conducting an organizational assessment
* Managing an executive transition
* Recruiting and compensating a new executive director
* Evaluating board member and executive director performance
* Evaluating board structure, policy, and practice (including board recruitment)
* Growing and strengthening the development (fundraising) function
* Evaluating new programmatic, partnership, and funding opportunities
* Maintaining the balance of power...