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Nonprofit Governance Models

The board of directors is the principal oversight body for non-profits. It promotes accountability and transparency and sets the objectives of an organization. The board is comprised of strategic and visionary leaders who deliberate on the most important issues and take consensus decisions. These are communicated through resolutions. They also delegate responsibility to committees that function explanation like departments of for-profit companies, for example, a finance committee, fundraising committee, planning committee, and public relations committee.

Non-profit governance models don’t fit all and that is the reason why many organizations choose to adopt a hybrid model. The board must ensure that it is completely independent of private parties, regardless of their model. Any conflicts of interest which could harm the credibility or reputation of the charity, or put the donors at risk, should be strictly scrutinized by the board using a conflict of interest policy.

Nonprofits tend to choose the cooperative governance model, which grants every board member equal voting rights and a shared level responsibility. This is a very democratic model, and is most effective when board members demonstrate their commitment to the mission of the organization. It can be challenging, however, when the board starts losing focus on its goals or if morale of the board members declines. Patron governance is another common model. It is best suited for nonprofits that focus on fundraising campaigns. Patron board members are usually wealthy individuals who lend their name to the charity and make use of their connections to solicit funds from their networks.