Board of Directors or Board of Trustees?
For-profit organizations are governed by boards of directors, but many nonprofits have boards of trustees. This latter term is appropriate because it conveys the public trust responsibilities of nonprofit organizations. But is this term allowed by Illinois law?
The Not for Profit Corporation Act in Illinois allows an organization to select its own term for its governing body. The law states: “Board of Directors” means the group of persons vested with the management of the affairs of the corporation irrespective of the name by which such group is designated. (805 ILCS 105/) General Not For Profit Corporation Act of 1986, Section 101.80 Definitions (d)). Other states likely have such a law and may have the information on their respective websites.
What is a good size for a governing board?
According to the BoardSource governance survey, the average size of a board is sixteen members, the median being fifteen. Organizations with larger budgets tend to have larger boards.
The minimum number of board members in nonprofit Illinois corporations is three and the maximum cannot exceed the established minimum by more than five. (805 ILCS 105/ General Not for Profit Corporation Act of 1986, Section 108.10, Number Election, and Resignation of Directors, (a) and (b)).
It is helpful to have an uneven number of board members to avoid tie votes. Once boards exceed twenty-one, they begin to become unwieldy as a unit and there is a tendency to delegate business to an executive committee.
Should we have term limits for board members?
It’s not uncommon in nonprofit organizations to find board members who have served for decades, sometimes for life. This can bring continuity and stability to the organization, but it comes at a cost. If there is little board turnover, there is little opportunity for change and growth. The organization may be perceived by others in the community as elitist and closed to outsiders. By establishing term limits, a board can encourage broader participation. A common system is to elect a board member for a two- three-year term, with an opportunity for reelection to a second term. After that the board member would be required to take at least a year off before being eligible to serve again. (Patricia L. Miller, “Meeting the Challenge of Trusteeship.” Illinois Heritage Association Technical Insert 121 [Jan.-Feb. 2003], 2.)*
It can be difficult to make a change if it has been the custom for people to serve indefinitely. One tactic is to create emeritus board status for long-serving members, who are “retired” with appropriate recognition. They may continue to attend board meetings but do not vote. Another approach is to create an advisory board that offers advice on major projects, such as capital campaigns, long-term financial stability, or succession planning.
Is fund-raising a board issue or a management issue?
Nonprofit organizations often find that their boards are reluctant to participate in active fund-raising. Board members may be willing to help with the harvest hoedown, devise an evening of “Murder at the Museum,” or create an enticing lecture series. But when it comes to actually asking for cash donations to support the organization, they shrink from the challenge. While acknowledging that it is a shared function, a book in the IHA circulating library comes down solidly on the side of board responsibility for supporting the organization financially, both by personal contributions and by actively seeking outside support. Fundraising for Small Museums: In Good Times and Bad, by Salvatore G. Cillella Jr., describes how to get the job done. Chapter 4, “Methods of Solicitation: Asking for the Order,” outlines different approaches to raising money and leads off by describing the tried and true “face-to-face” method. Elsewhere, the author discusses the case statement, direct mail, telephone solicitation, brochures, and the Internet.
Cillella covers nearly every known means of raising funds, including grants and planned giving. The book is full of tips that help take the fear out of fundraising.
*IHA Circulating Library