Board Size and Nonprofit Governance

With the large number of different types of organizations that can file for nonprofit status, it’s easy to see how a non-profit board could be a board of one or 51. As volunteers become invested in an organization’s cause, their passion grows, causing some people to seek a leadership position. Serving on the board gives them a leadership role while offering them valuable board experience. Nonprofit boards sometimes worry about being able to get enough people on their boards, and they elect or appoint everyone who’s willing to serve. That’s frequently how nonprofit boards become too large.

For many nonprofit board directors, serving on a nonprofit board is their initial exposure to all that goes into board service. With the new regulatory demands on corporate boards, nonprofit boards are also seeing their fair share of scrutiny and increased expectations. Today’s regulatory bodies expect nonprofit boards to perform governance according to regulations and law, even when they are novices.

Similar to corporate boards, nonprofit organizations are beginning to question their board composition, diversity and size. Changes are on the horizon as nonprofit boards seek to work as efficiently as possible so they can focus on the organization’s mission and still meet regulatory requirements.

Is There an Average Size for Nonprofit Boards?

BoardSource, a nonprofit board leadership and educational corporation, did a survey in 2000 and found that the average size of nonprofit boards, not including churches, was 17 directors. The number decreased slightly to 16 members in 2007, and the median number is 15. BoardSource notes that these statistics tell us that the average board size of nonprofits is slowly decreasing, and that the average size is still more than most experts recommend.

State laws determine the minimum number of board directors, which is usually two or three. Depending on the state, there could be a board of one, but it might be difficult to attain 501(c)(3) status with just one board member.

Nonprofit organizational budgets are sometimes a factor in the number of board members. Nonprofit organizations with budgets of over $10 million have an average of 18 board members, whereas nonprofit organizations with budgets of less than $1 million have about 14 board directors.

Arts and cultural organizations like ballet, dance, museums and performance organizations tend to have larger board sizes and robust sponsorships. Certain other nonprofit organizations guarantee representation to their constituencies as determined by geography, political office or some other relationship to the organization, and they also commonly have larger boards. Examples of such nonprofits are universities, chapters or national nonprofits, and political groups such as Women’s Institute for Leadership.

With regard to board size, evaluating the pros and cons of board size can help get it right.

Pros and Cons of Smaller Nonprofit Boards

The pros of smaller boards strongly outweigh the cons. Smaller boards tend to meet more often because it’s easier to accommodate everyone’s busy schedules. Board discussions are generally shorter and more focused than those of larger boards, which typically leads to faster and better decision-making. Since smaller boards spend much time together, they form close bonds, and are typically willing to give everyone a fair say.

There’s one glaring negative to smaller board size for nonprofit organizations. Being an all-volunteer board, board members are usually volunteering for additional events and activities because of the lack of other volunteers. Board members who serve on the board and invest much of their time and energy in volunteering as well often feel overworked and overburdened and believe these activities take too much time away from family and paid work.

Pros and Cons of Larger Nonprofit Boards

While getting lots of board members around the conference room table is difficult with so many schedules to consider, having many board directors shares the load of fundraising and other activities.

Having larger numbers of board members gives boards the advantage of “institutional memory,” where longtime board members remember much of the organization’s history. Larger numbers of board directors bring a larger network, as directors are likely to know many local business professionals such as lawyers, bankers and accountants.

Board dynamics also differ with larger boards. Board discussions are typically longer with larger boards, as they bring forth a greater variety of perspectives. On the flip side, having many opinions around the table allows quieter members to kick back and disengage, causing them to feel like their voice has no meaning. It’s also easier for cliques to form with larger boards, which can isolate some board members even further. Many large boards alleviate some of these problems by using an executive committee as a steering committee.

Having many board members places a larger burden on the executive director, who is required to meet all of their expectations. Larger boards also tend to have more committees, which means the nonprofit will need to hire more paid staff to manage them.

Finding the Right Size for a Nonprofit Board

Finding the right size for a nonprofit board is somewhat the same as finding the right size for a corporate board. Both types of corporations need to answer two questions — 1) what do they need to accomplish? and 2) do they have the right expertise on the board to achieve it?

According to a study by Bain Capital Private Equity, the optimal number of directors for boards to make a decision is seven. Every added board member after that decreases decision-making by 10%. Nonprofits can use that as a starting metric before considering the organization’s life cycle, mission and fundraising needs.

Boards that have national, state and local affiliates will likely need larger numbers of board members at the national level.

It’s generally best to have an odd number of board directors, although the bylaws may state that they can use the board chair’s vote as a tie-breaker.

Large nonprofit boards that need to pare down the size of the board may change their bylaws to state smaller numbers. Most nonprofit boards have staggered terms. As board members’ terms end, the idea is to not replace them with new directors. Directors stepping down from the board may be interested in reinvesting their time in a committee or in other volunteer service.

Board members can disengage quickly when they don’t find meaningful purpose during their tenure on the board.  Nonprofit boards that assess board composition strategically will make the most of board members’ talents and expertise.

It’s not enough to look at board numbers in isolation. Before changing the organization’s bylaws to reflect smaller numbers, nonprofit boards would do well to assess whether their board issues stem from some other source, such as a lack of commitment or a lack of leadership.