Does Your Nonprofit Need an Advisory Board?

The fact that your board is having a discussion about forming an advisory board is a good indication that it’s time to put the issue on your board’s agenda for discussion. You never know what experiences and perspectives your fellow board members will have on a certain topic once you bring it out into the open. Keep your discussion focused on the purpose that an advisory board would serve for your organization and what you expect them to accomplish for your organization.

If you choose to go ahead with forming an advisory board, you’ll need to recruit your advisory board members carefully, provide them with a job description, and be clear about the length of their term. Your board also needs to be clear on its own role. The board of directors is the legal governing body of your organization and that responsibility doesn’t extend to nonprofit advisory boards. Advisory board members don’t vote. What they can do is to offer you wise counsel in specific areas of expertise to help you make informed votes.  All of this work can successfully and securely be done using your BoardEffect portal. It provides a secure platform for boards to collaborate and you can also be sure that your decisions are documented in your board meeting minutes.

Your board discussions on the topic of forming an advisory board (or not) are to determine:

1. The purpose for having one
2. Choosing the right people to serve on your advisory board
3. Ensuring nonprofit advisory boards are clear on their purpose

If the answers to these questions aren’t clear, it’s not the right time to form an advisory board. If you have an existing advisory board and you can’t answer these questions, it’s time to have a discussion about disbanding it.

Does Our Nonprofit Need an Advisory Board?

As your discussions take shape over whether to form an advisory board, you might start by forming a list of reasons for forming one.

Here’s a list of good reasons to form nonprofit advisory boards:

• You need an advisory board to help you achieve a strategic goal.
• You want to enhance your nonprofit’s reputation and gain valuable support from your community.
• You want to supplement the strategic work of the board.

While there are valid reasons for forming nonprofit advisory boards, it’s also prudent to consider the reasons for not forming an advisory board.

If the following reasons continually come up during board discussions, it’s not in your nonprofit’s best interests to form an advisory board:

• Because other nonprofits have one and we thought we should too.
• To fill the gap in your board because it isn’t fulfilling its responsibilities.
• To fix board dynamics and your board is having trouble.
• To delegate responsibility for fundraising, so the board doesn’t have to.

That should give you a pretty good idea if you’re ready to form an advisory board. If the light is green, the next step is to explore the different types of advisory boards and decide which one will help you fill your purpose.

Explore the Different Types of Advisory Boards

Your board discussions should help you determine what you want an advisory board to do to advance your nonprofit’s mission. As the themes for your discussions become more refined, you’ll likely find that your advisory board falls into one of these four categories:

1. Fundraising. Similar to the expectations for board giving, advisory board members should be expected to make some kind of donation every year. Donations don’t have to be large, but advisory board candidates should be told upfront that this is one of their expectations. That said, fundraising is a major activity for nonprofits and one that the board should take ownership of. Advisory board members may choose to participate in fundraising efforts, but it shouldn’t be their sole purpose.
2. Expertise Needed for Programs. Every board has a different level of expertise. Your board may include financial experts, business leaders, and members of the community. It’s valuable to have expertise on the board in specific areas, but what do you do when none of them has expertise in the area of your programs and activities? An advisory board could be the right fit to fill this gap, especially if you need people that are well-acquainted with the population you serve.
3. Status. It is possible to have a “status only” advisory board for a nonprofit. In this case, you’d add the advisory board members’ names to your letterhead, website, and other literature or media. People with notoriety often like having their names with a charity they care about. With this type of advisory board, there are no expectations for the board, they don’t have goals, and they might not ever even meet each other. Their purpose is to give your nonprofit credibility as an ethical organization with integrity.
4. Fiscal Sponsor. It takes time for newly formed nonprofits to complete all the proper steps to complete the paperwork to become a legitimate 501(c)(3) organization. In the interim, an advisory committee could manage the organization as a nonprofit, as long as they’re operating under the auspice of a fiscal sponsor. In this situation, the nonprofit can’t have its own board of directors until they registered with the government. In this situation, the legal responsibilities would fall on the fiscal sponsor’s board. Once the new nonprofit is official, it needs to establish a formal board of directors, which usually includes one or more founding members.

Concluding Thoughts on Establishing an Advisory Board

Keep in mind that establishing an advisory board isn’t a “set it and forget it” activity. Working with and monitoring the activities of an advisory board puts more work on the board’s plate. Be sure that your board is willing to commit the time to ensure that your advisory board is serving its intended purpose.

The risk in ignoring your advisory board is that they’ll lose interest in staying involved. Your advisory board members may feel that you asked them to join your advisory board solely to make large donations and that’s bound to create resentment.

If at any point, your advisory board isn’t working out, it’s time to consider disbanding it. Former advisory board members that still choose to be involved could form a committee of advisors or serve as volunteers.