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Thinking Like a Corporation is a Good Idea

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Today’s nonprofits face a wide range of challenges, from changing regulations to shrinking volunteer support to the need to demonstrate impact to the accelerating  number of competing organizations. 

As such, they will not remain relevant if they ignore the importance of processes and procedures. These two terms have always been the mainstay of the corporate world, offering structure, consistency, and a strategic outlook when applied properly.  But now nonprofits are finding that they, too, must embrace these ‘business’ concepts in order to sustain their vision.

At a recent Nonprofit Board Chair Boot Camp hosted by SobelCo, it was made clear from the outset that nonprofit designates a tax status, but it is not a business plan! While being tax-exempt is a key advantage for the nonprofit community, the reality is that having strong board leadership, staff, and volunteers is the most effective way for the mission to be achieved.     

Processes and Procedures

After establishing the mission, in order to shape a nonprofit based on corporate guidelines, the organization should start with by-laws. This document lays the legal foundation for the group and establishes parameters while focusing on consistency.  The by-laws don’t just lay the groundwork for the volunteers and board members.  Detailed job descriptions for the staff are included as well, especially to avoid any unnecessary confrontation between the staff and the board. Clarity helps minimize confrontation and ensures smooth internal operations.

Next, the organization needs to examine its governance policies, asking themselves how they identify, recruit and train board members, as well as defining what they expect from the trustees. To provide clarity, a ‘contract’ signed by board members can spell out the responsibilities of the role. While not binding, the process confirms for those accepting a board position that the job must be taken seriously.

Whistle-blower policies, harassment policies, proper insurance coverage (BOD and cyber security!) and other tools help the nonprofit remain in compliance and assure it is adhering to the standards of any organization – whether for profit or nonprofit.

Along with the mission statement, by-laws, and governance committee, other processes can include establishing an audit/finance committee, a strategic planning committee, events committee, marketing and communications committee, programming and others that address the specific needs of the nonprofit.  These committees can also become a recruiting tool for future members and a great place for grooming future board leaders.

The output from these committees will include strategic plans, marketing and branding plans,  programming plans and other blueprints that will carry the organization into the next three to five years.

Being Effective and Efficient as a Nonprofit

Those nonprofits that readily accept the need for formal, systematic, and planned policies and procedures will be much more likely to thrive in a competitive and congested environment.   

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