The nonprofit board plays an important role in the success of your organization’s mission. Nonprofit boards provide guidance and oversight, making sure the appropriate internal controls exist and that checks and balances safeguard organizational funds and reputation. The guidance, experience, and leadership qualities of board members help to set the tone for how an organization interacts with its community and determine the direction for the future of the organization.

George Persekian is a senior manager of business development for Wipfli LLP, a nationwide CPA and consulting practice. His passion lies in working with nonprofit clients to identify areas they can streamline for improvement. A nonprofit board member himself, George delivered the Position Your Nonprofit Board for Success session at the Nonprofit Finance Leaders Forum.

Excerpted from George's presentation, here are four tips to help you generate more productive engagement between your finance team and your board of directors:

1. Recruit passionate, talented board members

It’s not enough to have a board—successful nonprofit leaders know they need to recruit the right members to the board in order for it to really serve as an asset to the organization.

What makes an effective board member? First, they attend all board and committee meetings. In order to ensure maximum attendance, it’s a best practice to set out meeting dates for a full year in advance, so board members can plan for them. Supply materials, such as reports and publications, in advance of the meetings. Good board members will want to read and study those, so the board meeting can be productive.

Effective board members treat all information discussed or exchanged as confidential. They respect the organization’s staff and time; and understand the boundaries between the finance staff and the board.

Organizations need to have a board with varied professional backgrounds and skills. You should recruit as much diversity as possible, because this will ensure your board considers decisions from a variety of experiences. Each board of directors should establish a nominating committee responsible for helping to find and recruit new board members when needed.

Keep the “three D’s” in mind as you recruit new board members. Every board needs some “doers” who easily solve problems and get things done as well as “donors” who can advance fundraising efforts and “door openers” with close ties to the community who can help form partnerships and collaborations.

Watch a replay of the entire session, Position Your Nonprofit Board for Success, as well as six other virtual events at the Nonprofit Finance Leaders Forum.

2. Provide training for the Board

Help ensure the success of new board members through training. As the finance leader, you should explain basic accounting terms and definitions and walk them through the most recent financial reports and tax filings of the organization.

Provide a packet of information that makes it easier to come onto the board. Provide an organizational chart. Give them a tax due date listing and a copy of the current year budget. Explain the current financial policies and procedures.

Share the organization’s strategic plan and talk through the goals and objectives. Talk about your expectations of their role as a board member and discuss their expectations.

It may be helpful to establish some peer-to-peer connections between your organization’s board and the board of another organization. This can lead to expertise sharing that strengthens the knowledge and skills of both boards.

3. Refine your strategic plan

Your nonprofit board should help guide the strategic plan and keep the organization accountable to objectives. Involve them in creating and refining the strategic plan. Without a strategic plan, the board lacks the tools to provide good guidance and oversight.

A good strategic plan should communicate the big picture about the organizations mission and community, as well as map out specific and measurable goals for the year ahead. Identify specific actions and costs needed to reach your strategic goals and fulfill your mission. A strategic plan is only truly actionable when your organization possesses the technology and data needed to accurately assess outcomes and impacts.

4. Develop reports your board members want

Finance leaders will have many opportunities to report financial and operational results to the board. Ask board members what reports they would like and why. Provide some sample reports and discuss them with the board. Deciding what reports would deliver the most value should be a collaborative decision between board members and the executive team. Of course, some reports must be reviewed by the board for compliance requirements. Explain those reports to the board so they understand the significance of them.

Your organization is unique and different nonprofit organizations have different financial reporting needs. Some of the factors that may drive your reporting include the number and size of your programs, how much non-grant activity you have, your funding source requirements and the organization’s overall financial condition.

When reporting to the board, always include a financial report as an agenda item. You don’t want to bog down the board with minutiae, but you do want to provide them with complete information. You’ll need to be able to present information clearly and concisely, at a very high level, in order to keep board members engaged. When possible, provide visualizations of key performance indicators in your reports. This can make it easier for board members to spot spending issues and funding gaps.

Sage Intacct includes a role-based dashboard designed specifically for board members that finance leaders can customize to allow board members to quickly evaluate and understand the performance and outcome metrics unique to your organization’s mission. Here is an example of a Board Member Dashboard.

Also, the Sage Intacct Nonprofit Digital Board Book below provides pre-built dashboards based on best practice metrics to deliver real-time insights into mission impact. This tool helps board members analyze financial performance, as well as benchmark that performance against other organizations.

Conclusion

Nonprofit organizations need a capable, committed board to steer them toward mission success and provide strategic guidance. Success starts with having the right people on your board, delivering a combination of skills and experience that make a big impact. Once you have a winning team, it should be the responsibility of the nonprofit finance leader to make sure board members receive training about basic nonprofit accounting and compliance, so they will be able to work closely with the finance team. Working with the board, define and refine your organization’s goals and strategic plan. Finally, ask board members what they would like from finance in terms of reporting and work to deliver the data, custom reports and dashboards they need as decision makers.

For more tips about how to position your nonprofit board for success, we invite you to watch a reply of the full presentation—and six other virtual sessions by nonprofit finance and technology experts—at the Nonprofit Finance Leaders Forum.