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Nonprofit Governance Models

The board of directors is the primary governing body for nonprofits. It is a champion of accountability and transparency as well as sets the objectives of an organization. A group of strategic and visionary leaders, the board deliberates on issues of high-level importance and makes decisions based on consensus that are communicated via resolutions. They also assign responsibility to committees that function similarly to departments of for-profit companies, such as a finance department planning committee, fundraising committee and public relations committee.

Governance models for nonprofits aren’t the same for all organizations, which is why most organizations eventually move toward an approach that is hybrid. The board must ensure that it is free from other private organizations, regardless of model. Any conflicts of interest which could harm the credibility or reputation of the non-profit, or put the donors at risk, must be thoroughly scrutinized by the board using a conflict of interest policy.

Nonprofits prefer the model of cooperative governance, which gives each board member equal levels of voting power and accountability. This is a very democratic system and can be effective if the board members demonstrate their dedication to the mission of the organization. Nevertheless it can be challenging when the board becomes distracted on its mission or when morale starts to fall. Another common model is the patron governance model which is more appropriate for nonprofits that focus on fundraising campaigns. Patron board members are typically wealthy individuals who give their name to the nonprofit and leverage their connections to solicit funds from their networks.

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