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How Do Nonprofits Manage Their Boards?

Alliance Insights

August 2008

How Do Nonprofits Manage Their Boards?

New Research Reveals Familiar Technologies, Unexpected Costs

Dottie Schindlinger

Alliance for Nonprofit Management members communicate with their boards in a variety of ways and often spend thousands of dollars in the process, according to new research conducted by the Alliance and BoardEffect® and presented at the Alliance’s national conference.

This national survey – the first of its kind in the nonprofit sector – polled over 190 Alliance members, representing almost 20% of the membership, and found that the average nonprofit incurs more than $7,500 in staff time and expenses annually to manage the work of its board of directors.

The drain on staff time is considerable and can distract the organization from focusing on the mission. Seven in ten organizations reported that the chore of preparing board documents requires two to five staff members. Six in ten admit that it requires at least 10 staff hours a month and about one out of every five organizations spend more than 20 hours each month.

The research also showed that nonprofits are increasingly using a variety of methods to facilitate board communication. Although phone calls and emails are still the most popular communication tools, the survey shows that more nonprofits are also using board portals, websites, and other online tools with increasing frequency.

Annually, the average nonprofit reaches out to the board with:

One-to-one phone calls: 2,083 times
Email: 1,684
Face-to face meetings: 1,095
Board portal: 844
Public website: 719
Mailings: 704

While the use of a board portal has yet to break the top three tools for working with a board, board portal users report using it more frequently than any other technology, except phone calls and emails.

Mike Kipp, a board member for Hope International Credit Corporation – a nonprofit that works with communities across the globe making micro-loans to improve the quality of life – and presenter at the Alliance conference illustrated the utility of a board portal with his own experiences as a board member.

“Hope International adopted a board portal for a variety of reasons, including administrative efficiency and discovery,” he said. “For Hope, the most valuable function of our board portal is the way it enables the full board to continue the thread of important conversations between meetings.”

The increased use of board portals over other more traditional methods may also be due to concerns about security and efficiency. Thirty percent reported that a staff member or board member has expressed concerns about document security. Board portals built expressly for nonprofit e-governance should be password-protected and include security measures that give nonprofit staff and board members the confidence that sensitive documents are stored and shared securely.

The survey also revealed that the ongoing responsibility of updating and maintaining board documents, including board manuals and policy documents, was a drag on a nonprofit’s efficiency. Four in ten organizations update their manuals once a year or more; eight in ten go through the process at least every two years. With each update, the administration of review, revision and approval can take hours of board time – time that could be spent focusing on a nonprofit’s mission and service.

Overall, the survey reflects a growing realization among nonprofits that e-governance isn’t just one tool or process, but a new and comprehensive approach to increasing efficiency, transparency and board engagement. E-governance, enabled by board portals and other processes, should empower nonprofits to use their precious staff and financial resources efficiently, maintain mission focus and – ultimately – better serve their communities.

“Hope International isn’t about board management or e-governance; we’re about helping people around the world escape poverty,” says Kipp. “But effective board management and e-governance are tools that we use to stay focused on that mission.”

For a full copy of the presentation and survey results, Alliance members can visit http://www.boardeffect.com/alliance.

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As Executive Vice President for BoardEffect®, Dottie Schindlinger brings over a decade of project management, marketing and strategic planning experience to mission based organizations in the nonprofit sector.

BoardEffect® is a comprehensive web-based e-governance tool that engages nonprofit boards, streamlines information management, and decreases risk. Managing a board of directors is one of the biggest challenges and opportunities for nonprofits. E-governance eases the burdens of board administration and increases opportunities to achieve mission goals. BoardEffect®: E-governance is Good Governance. www.boardeffect.com