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Advisory Board or Governing Board?

By April 16, 2020No Comments

Organizations often ask about starting a nonprofit advisory board—usually because it sounds like a good idea because they often don’t have a clue about what an advisory board will do and what it won’t do. After looking at what an advisory board can do for your organization, you can make an educated decision about whether or not the organization will benefit from having one.

What is an Advisory Board?

Let’s get everyone on the same page with a definition of an advisory board. An advisory board is a group of individuals brought together for their specific skills and purposes that can serve the organization.  Typically, the individuals serving on the advisory board do not have the same skills as board members, instead, their skills are usually complementary to those of the board.

First, you need to know that an advisory board is not a governing board or the board of directors. This means that the advisory board has no legal responsibilities for the functioning of the organization, no fiduciary responsibilities and no responsibility (or right) to direct the work of the organization. In other words, the governing board, commonly called the Board of Directors, has full authority for the organization and can over-rule or over-ride any suggestions or recommendations made by the advisory board. Ideally, that won’t happen, but it can.

Reasons for an Advisory Board

Advisory boards are usually a board or committee of the governing board. Thus, they can be formed for any reason determined by the governing board. Typically, the board will identify a specific need where  particular skills or resources are needed; to solve this need, the board may identify other individuals who could provide the skills or resources. Depending on the need and the purpose of the advisory board, this may mean that the group meets for a short time, or on an on-going basis.

Short-term advisory groups, often called ad hoc advisory boards, usually meet for a year or less. If there is an ongoing need for an advisory board, the board of directors may decide to establish a standing advisory board.

Sometimes governing boards form an advisory board that “lends” its names to the organization. Used quite often for fundraising, marketing and public relations, this advisory board essentially is an endorsement from a well-known, well-connected individual. Both the organization and the individual recognize and acknowledge that through the use of the endorsement from the advisory board member, the organization will be able to leverage additional funding, resources, etc.

Organizations that are not formally recognized as nonprofit entities (they do not have 501(c)(3) tax exempt status, may also form an advisory board. In this case, the advisory board functions much in the same way as a governing board; however, legal responsibility for the organization is usually retained by a fiscal sponsor.

Forming a Nonprofit Advisory Board

One of the mistakes nonprofits make when forming an advisory board is forming when there is no clear purpose for the board. Before approaching anyone about serving on the advisory group, take the time to develop its purpose. An additional mistake nonprofits make is forming an advisory group, getting agreement from individuals to serve and not maintaining regular contact with those serving.

Before forming an advisory group, develop the group’s purpose—will it be an ad hoc group or a standing board? Develop how it will function—will it meet monthly, quarterly, bi-annually? Since the advisory group does not have any legal, governing responsibility, it may not be necessary to have frequent meetings. How will the advisory group interact with the governing board? Will they meet together on an annual basis, to connect and ensure everyone is strategically aligned? Once these questions are answered, and the role of the advisory group is defined, its role needs to be included in the organization’s by-laws.

Having the group’s purpose defined and how it will interact with both the governing board and the Executive Director will help ensure that the advisory group will be engaged. Many nonprofit leaders have good intentions but find themselves with too much to do and managing an advisory group (whose purpose for existing is to strengthen the organization and assist them) just one more thing to do…one more thing that doesn’t get done. It may be helpful to have an honest assessment prior to recruiting advisory group members to ensure that they will be valued as a resource. It is better not to have an advisory board than to manage it poorly.

Advisory boards or committees can be valuable assets to the organization when their purpose is clear and understood by the Executive Director, the board of directors and the advisory group members. Need help forming an advisory board, contact us, we can help you define your need and how they can help to fulfill that need.

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