Full transcript of “When do Nonprofit Executive Directors Need Board Approval”. Click a timestamp to open the video at that moment. Need another video? Use the YouTube transcript generator.
0:00 as a nonprofit consultant and someone who has licensed a program model across the United States to a bunch of different nonprofits I'm always amazed by the different uh involvement that board of directors have at the day-to-day level the operational level of nonprofits some executive directors seemingly need to go to their board for like every little thing to get approval and other nonprofit executive directors are empowered to make these decisions these day-to-day operational decisions they're empowered to do that and they don't need to go get board appr approval for everything um or for most things so I thought it was appropriate to have an episode on when exactly does an executive director need to go to the board of directors because even in the beginning when I was an executive director I did not know the answer to
0:45 this let's talk about [Music] it welcome to episode 72 of four purpose live where I help you get clear get focused and be impactful by showing you how to step fully into that calling that you you've been given without taking on that common narrative that nonprofits need to struggle that's right together we can get you in your sweet spot using your strengths and your talents to serve this world and build a movement of support for your mission simply by living for purpose on purpose I'm Rebecca Brit your host and today we are talking about when do you have to go to your board for approval as an executive director okay now before we get started I have completely reinvented the strategic planning process with my impact road map which is a practical plan that says what exactly are you
1:31 trying to do who are you trying to do it for what are your kpis or or how will you measure if you're being accountable to that mission and what Key activities do you need to focus on to get you there if that's of interest to you go check out my impact road map at forp purpos life.com impact all right so the short and fast answer to this question when do executive directors need board approval is when your bylaws say so your bylaws should articulate exactly when an executive director needs board approval and how does approval happen you know is there a vote is it just a second signature on something how does approval happen it should it should lay out those steps so everyone is clear now if you're like me when you first started your
2:17 nonprofit you didn't even read your bylaws I mean I was like bylaws whatever I didn't even know what those things were I did Articles of Incorporation I had like oh I need to get my 501c3 status oh they need these bylaws okay go find them on Google copy paste done okay and it wasn't until a couple years in honestly when I was starting to want some structure and some accountability for like when are board meetings happening and how do minutes work and uh how do we hold the board accountable and like some of these things that it was like oh your bylaws can articulate how you run and how you're supposed to run and how people are held accountable and what happens if a board member does something wrong and when do I have to go to the board all of these things I'm like oh bylaws are actually really valuable and they protect me and they
3:04 protect board members and they protect the organization because it's a whole point of having a board of directors is for oversight so that it's not just one person making choices with money that the public has given you but there is a group of people that have decided to govern the organization in the way that the bylaws States that's another thing make sure your board of directors has read the bylaws they know them because they're supposed to be governing the organization based on those bylaws okay it's not just like if they think it's a good decision or not but you have to go by the governing document of the organization okay back to when you need to go to your board for approval so there's several things that you might need to let's say you're spending money
3:51 you might need to go to your board for that let's say you need to sign a contract let's say you need to sign a lease agreement something like that these are all things that you're like oh I might need board approval if you're developing a new program you want to launch a new fundraising campaign there's all these decisions that executive directors need to make and some of them can seem really big like oh we want to start this support group for parents I'm going to pitch it to the board to see if we should start this support group you don't need to you are the chief executive officer okay you have been entrusted to accomplish the mission in whichever way you see fit now there should be a strategic plan that you guys have come up with together and
4:36 that they've signed off on So You ideally want to be following that strategic plan but I don't like it to not have any wiggle room that you can't course correct if you need to the biggest thing is to have this discussion with your board members so that you guys are all in agreeance of how much do you need to stick to your strategic plan when does the board expect you to come to them for approval and if they do let's write it into the bylaws so that we can have a system and a process that we can hold each other accountable to so I have had people um want to start a stable moments program and our licensing fee for the stable moments program right now is $34.99 a month that's it and I have had people say before I um you know purchase the licensing agreement I need
5:23 to go and talk to the board of directors okay well I see this as the same as like licensing agreement when you like buy an app on your phone or something like it might be a subscription but you're that's literally what you're doing like when you get Gmail or you get Zoom like you are purchasing a license agreement and hopefully you do not go to your board for every time you need a new software or you need to like you know all the things we use right canva and all the the platforms that we use that cost money hopefully you're not going to the board for every one of those decisions the reason why you don't want to is like total bottleneck right the board is there for for oversight they are not there to be this middleman that
6:10 like you get to sit and take in all the information and then you get to go to your board and do these lengthy presentations on like why you feel like Zoom would help you accomplish your mission or why you feel like this small charge would accomplish your mission like you shouldn't have to be proving yourself constantly as like I make good decisions for our mission no like we know you make good decisions for your mission that's why we have allowed you to be the executive director of this organization go on and choose whatever you think is best this goes for hiring like you would think that the board would have to approve hires but no like you should have a budget that you work within that you can hire whoever you want whether that's contractors or employees or whatever now the board
6:56 would approve the budget so if the budget is there you can't just go out and hire someone like so they are there to say like yes you have this budget and they should be approving that budget once a year and looking at it at least quarterly to say like okay we did agree that we are going to have one full-time salary and this amount for contract workers and this amount for part-time workers okay but like the whole hiring and all that we already discussed what the budget was now I just need to I need to be empowered to go higher based on that budget so you shouldn't be going to them every single time you need to make a decision about a hire or whatever you get the budget and then they trust you to make the decisions now they do get to see and the public gets to see what you spend your money on of course you have
7:43 transparency um and so they they may and should look at how you're spending your money and say oh what was this oh okay maybe we could save money here this way or uh that wasn't approved or um we might need to cut this back like they will have some oversight to make sure that you are spending sustainably and oversight to make sure that you're making good decisions but it's not like a call us every time you need to make a good decision type thing okay now as far as money does go it is very common for non-profits to have some type of Maximum spend so depending on your budget this could be small like when I uh we had like a80 to $100,000 budget um when I was running my program
8:29 and and $500 was my Max like I could go spend $500 any time without approval uh but anything over 500 I needed to get a second signature and that could come from the president of the board or the treasurer of the board um and that was laid out in the actual bylaws and you can even say like can I just reach out via text can I reach out via email like what is the process to getting that approval or is this like I need to bring this to the board and I need to present it and and a quorum needs to approve it and all of that but like right now if you think about it like what are the things that you go to the board and like present and see if they will approve and are they things that you should just be
9:14 able to say you know what this fits our mission good we're doing this so some things that I do think that boards would approve or that you would want to present to the board would be big contracts purchasing of prop property Acquisitions let's say another nonprofit that's just like you is competing with you and they want to leave the space and you're like you know what let's acquire them that would be a board decision you'd want to make sure that everybody's thinking about is this you know on point with our mission is this going to help us further our mission name changes like if you want to change your name if you want to change your mission all those things should have board approval but when you're bringing things to the board for board approval it's also so
9:59 important that you trust that your board is sitting there going they put on this hat a lens that says okay here's our mission statement and does what they're presenting will it further our mission and do we have money for it will this be a sustainable Choice those are the only two criteria like that they should use maybe if there's other conflict of interest things maybe there's other things but this isn't like hey guys I have an idea in the board being like that sounds really great approved like no and I you might be like whose board does that trust me I feel like most a lot of people don't know what it is to be a board of directors
10:45 like they don't even get the point they don't they might not have a job description they don't have a role that they know what their role is they just like sit on a board they like offer their opinion and they like they second things and but like as far as them understanding their role and why they exist and why the whole board of directors exists like I'm sorry I've seen it too many times I don't know that many board members get properly onboarded onto a board with that said you can always train your board members or you can always say like hey we need to make we need to pause make sure everybody has a job description everybody understands their role um everybody understands the B laws
11:30 understands that the whole reason we exist is for oversight and the whole reason the whole organization exists is to accomplish this Mission so the criteria in which you should be evaluating every thing that we bring up or the criteria in which you're bringing up ideas because we also know board members bring up ideas is is this something that is going to further our mission is it sustainable and is it something that should take up our resources meaning time money Focus all of that that's how a board of directors and an executive director needs to be thinking so think about like all of the things you would go to the board for and see like should you just be able to make
12:16 those decisions and if you say like in your head I know if I just made that decision without asking the board they would be like what are you thinking then it is definitely time to have a conversation with your board about what do you trust me to do like where where do I make decisions and where do we expect approval and let's get that written out and give them some of these examples big contracts um agreements like for bigger nonprofits the executive director sometimes program staff they can sign off on stuff so the board doesn't need to be signing off on everything but as you get bigger as you get into a big girl or big boy organization they will become way more oversight and they will expect that staff is handling all of that stuff in
13:03 the beginning when you're smaller it's fine that they are more working and that they're going to help you uh you know work through some things and approve some things it doesn't matter like there is no right or wrong what matters is that you guys understand you have it written out it's agreed upon and it is fostering trust between the two because what you don't want is oh well they don't trust cost me to do my job I have to go to them they are the Aller but they're not in the weeds of the program every day and it creates this weird like power differential that that isn't helpful and won't help you grow in and accomplish your mission okay so ask them get clear with your board uh and make
13:50 sure that you have you know exactly when you would go to them to approval or not if you would like your nonprofit featured on a future episode make sure to subscribe and then drop the name of your organization in the comments below make sure that if there's any question of when you would go to your board for approval that there it is written in the the bylaws when you would do that and exactly what does approval look like do you need a quorum do you need to get everybody's vote do you just need a signature do you just need an email that says hey that's approved write that all down and even if right now you're kind of okay with the approval because you're new and they're doing a they're a lot more of a working board have some conversations about someday how you want this relationship to look and how an
14:35 executive director role would be as you get bigger when you're hiring and you're firing and you are signing agreements and contracts with contractors all the time and all that stuff be like that's that's not H how we're going to run then so paint that vision for them and at least be in agreeance that that is where you're headed and understanding that you will go through some iterations of how you you work as um board versus staff as you grow okay make sure those bylaws are super super clear ensure that your board of directors has the right criteria for approval when you're asking them for approval make sure that you know that they are like is this good for the mission and is it sustainable can we sustain it is it financially responsible
15:21 okay if you're thinking that this is a good conversation for you and your board to have go ahead and hit that like button and consider sharing this video with them don't forget to check out my impact roadmap at forp purpos live.com impact and thank you so much for your service to this world until next time
