Nonprofit organizations still need to run efficiently, despite not being in business to make money. While they are motivated to achieve other things than just sheer profitability, there still needs to be effective corporate governance in place to ensure that it operates effectively and lawfully.
There are many ways that nonprofits can make sure that they achieve their goals while operating, and those in charge of finding those ways often sit on the board of directors. But do nonprofit organizations have to have a board? Do voting members of a nonprofit need to be in place?
Here, we look to answer those questions which can be essential to understand fully if you are looking at online voting for associations or any other collective you are running for social and community benefit.
Nonprofit organizations, which are incorporated, do need to have a board of directors. Doing so can ensure that the aforementioned corporate governance structure is implemented, which can make certain that the nonprofit is run properly. Board members are usually appointed by voting members, who cast their votes on who should be selected for a board in an election.
If a nonprofit organization chooses to remain unincorporated, they legally do not need to appoint a board of directors to run. Nonprofit organizations may choose to remain unincorporated as they are often much smaller entities with few employees (if any) and low annual revenues. That is not to say that all unincorporated organizations are small. For that reason, a large unincorporated nonprofit organization may still want to have a board of directors, even though they are not legally required to do so.
The reason being that a board of directors at a nonprofit corporation has a whole host of benefits. Board directors often have many years of experience working in nonprofit, private, or public companies. That experience should amount to a great deal of knowledge that can help a nonprofit run in an optimal fashion.
Understanding business through expertise learned from working elsewhere can mean board members know how to improve aspects of a nonprofit, know where more capacity can be found, and ultimately, know how to derive more value from better-placed inputs. Those decisions could be from improving investment spending or knowing how to motivate staff more effectively to harness their true potential.
The number of board directors a nonprofit organization needs depends on the state the entity is registered in. However, that figure will only refer to the minimum number of directors required. A nonprofit organization may wish to have more board members to make use of that aforementioned business knowledge.
That can be possible as the majority of board members at a nonprofit are likely to be volunteers. So, if it is still efficient to do so, having more board members than required can be advantageous. Picking a wide range of board members to ensure diversity can also help a company become more efficient. Looking at applicants from various backgrounds, both personally and professionally, has been seen to improve the chances of a company’s success.
Nonprofit organizations often have the tricky job of achieving a lot with fewer resources at their disposal. Therefore, the difference a board of directors can make, especially when made up of volunteers, can be huge. By working voluntarily, and imparting industry knowledge for free, board members can help steer a company towards success; helping to hit the targets stated within its mission statement.
However, remember that becoming a board member is not always a totally altruistic activity. Being a member of a board for a nonprofit organization, particularly a well-known one, is something that a person can put down on their resume. It is also a great way for that person to make contacts and further develop their network. All of this can improve a person’s employability and, thus becoming a board member, can often be a competitive affair when a space opens up.
Therefore, voting for board members needs to be run smoothly, with little room for mistakes or for procedural interference. That can be done in a number of ways - either through an online voting system or otherwise. What is essential for your final choice is that any system that is set up is robust and comprehensive. Doing so ensures the sanctity of the process in place and the validity of the final outcome.