Nonprofit Governance Models

The board of directors is the principal oversight body for non-profits. It is a champion of accountability and transparency as well as sets the goals for an organization. The board is a group of strategic and visionary leaders who deliberate on the most important issues and make consensus-based decisions. They communicate these decisions through resolutions. They also delegate their responsibilities to committees, which function as departments in for-profit companies such as the finance committee and committees for fundraising and planning, and public relations committee.

Governance models for non-profits aren’t universally applicable, which is why the majority of organizations eventually adopt a hybrid approach. The board should ensure it is not influenced by other private parties, regardless of the model. Any conflicts of interest that might undermine the credibility or reputation of the organization, or put its donors at risk, should be thoroughly scrutinized by the board using the implementation of a policy on conflicts of interest.

Nonprofits select the cooperative governance model which gives each board member an equal level of voting power and responsibility. This is a very democratic model and can be efficient if the board members show their commitment to the organization’s mission. Nevertheless it can be difficult when the board is unable to focus on its mission or if morale starts to decline. Another common model is the patron governance model which is better suited to nonprofits that focus on fundraising campaigns. Patron board members are typically wealthy individuals who provide their name to the charity and leverage their connections to solicit funding from their networks.

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