Nonprofit Titles – Trustee vs. Director

Posted on February 6, 2010 by  
Filed under Board Governance, Board/Staff Relationship · Tagged: , ,

A recent question to Ask Alyson: 

Hi Alyson, I am a member of a non-profit independent school board. From the start of incorporation 3 years ago, our members have been called directors and the officers are president, vice-president etc… What is your opinion about this wording compared with calling the members trustees and officer titles of chair and vice-chair? Thank you in advance for your thoughts!   Steve

Dear Steve:

Great question.   I think it all comes down to preferences because
the titles really do mean the same thing.
We generally see “trustees” associated with colleges and universities
(board of trustees) and “directors” associated with other organizations.
But I’ve seen trustees with other, non-academic organizations, as well.
I think that “Board of Trustees” is a bit more formal and “lofty”
so there may be come benefit to using it.
As you’ve noted, the titles of your officers can either be President and Vice President OR
Chairperson and Vice Chairperson.  So you can chose either.   I will tell you that when
I teach, I use President and Vice President titles because it’s easier than trying to
decide if I should use “Chairman” “Chairperson” “Chairwoman” or “Chair”….
Ido use the title of “Committee Chair” for all committees – for consistency.
So – it really comes down to personal preference. 
The responsibilities are the same.
Hope this helps.

Personnel Committees Need More Involvement in Compensation Decisions

Posted on October 22, 2009 by  
Filed under Board Governance · Tagged: , , ,

Today, I attended an informative seminar here in Charlottesville put on by two McGuireWoods, LLP  partners: Jeffrey Capwell (Charlotte, NC) and Michele McKinnon (Richmond, VA) .  The seminar was excellent and I highly recommend nonprofit executives and board members attend these seminars if they possibly can.

During one portion of today’s session, they discussed the background for changes to the IRS Form 990 and the form’s new questions about the determination of compensation for nonprofit staff executives.    Because of these new questions on the IRS Form 990, your Personnel Committee may want to adjust its staff compensation decision-making and approval process.  Here’s some background:

1. The IRS thinks that a well-governed organization is more likely to be a tax-compliant organization.  Increasingly, the IRS is asking more governance-oriented questions in not only the IRS Form 990 but the IRS Form 1023 (application for tax exempt status).

2. There seems to be a trickle-down effect from the private sector.  The fall-out from situations like Enron, WorldCom, and Madoff in the private sector will eventually result in increased regulation in the nonprofit sector. 

3. Expect to see more enforcement and expectation of disclosure and transparency for executive compensation for tax exempt organizations.

In brief, the Personnel Committee should review the compensation of all newly-hired executives as well as revisit these executive salaries on an annual basis.  Specifically, the IRS is expecting nonprofits to be able to do the following:

1. Show the compensation you’re paying your executives is comparable to similar jobs in your market.  A salary survey of nonprofits that are of a similar size in your local geography is a good starting point.  Be sure that you have included all compensation:  both salary and benefits, current and deferred salary, pensions, severance, housing allowances, club memeberships, etc.

2. Justify the amount you pay executives is equal to the value you receive.  

3. Provide documentation showing your Personnel Committee has  discussed staff compensation.  The Personnel Committee  minutes should include the compensation survey that you have used, a discussion of the value you will be or are receiving from each executive, and any concerns or dissentions in the determination of the final compensation. 

4. Show that the Personnel Committee’s decisions have been reviewed by the entire board, have been discussed and understood, and have been entered into the minutes of the entire board.   Is is essential that this review with the entire board includes a description of the total compensation paid to your executives – so that all board members understand the total compensation package and contracts for current and future payouts with their executives.

5. Be sure no one in a position to hire or determine salary for an executive is related to that executive.

In summary – be sure that your Personnel Committee is doing a thorough job of reviewing the compensation of new and continuing executives, that they have documented their discussions and decisions along the way, and that they are reporting these details to the rest of your board.

Lastly, McGuireWoods offers a free e-mail news service that follows legislation and regulation on a variety of topics.  I highly recommend the “Nonprofit & Charitable Advisory” which you can sign up for at

Ask Alyson: Effective Nonprofit Board Meetings

Posted on July 3, 2009 by  
Filed under Board Governance · Tagged: , ,

Dear Alyson

We have a particular question about our board; currently our board votes on everything including everything our committees decide to do and everything we will spend $$ on, however, this seems to extend our board meetings into eternity.  I wonder should we just let the committees make the decisions and report to the board what the plans are and be done with it….?  Then I worry that the board members will not feel as useful if they don’t vote on every decision…?  How to decide what the committees decide on and what the board votes on?  Can you recommend a solution?

Sheila Browning (alias, of course)
Executive Director

Dear Sheila –

Thanks for asking.  Your question is a very common one.

You are right – your board should let the committees decide most issues (especially those related to their subject matter).  The beauty of committees is just that – they take the work away from the entire board.  If you let the entire board re-discuss each of these issues, then you run the risk of micro-managing and wasting time.

The board approves issues related to these four areas:

1. finances – voting to accept budgets, accepting financial reports during the year, and fiancial projects over multiple years if you have them.

2. strategy – Do you have any sort of strategic plan or 2-3 year view of the future? This requires board approval.

3. policies – HR policies, operating policies, financial or investment policies, fundraising policies/standards.

4. Board members, board officers, approvals and new Executive Directors being hired and terminated.

Here are some ideas you and your board can try:

1. When you develop the next board meeting agenda, start by determining what DECISIONS need to be made by the board. Look to the list, above, to see what really needs to be decided by the board and focus your meeting on those items.

2. Decide what committee or staff will present the recommendations that is being made for the entire board to discuss and decide.

3. Think about what other information/updates should be shared with the entire board.  (Only allow 5-6 minutes for updates on your agenda.)

4. Be sure that the agenda, committee and staff recommendations, and any updates that the board will see at the meeting are sent out a week in advance.


I hope this helps you, Sheila.  Please do let me know how things are going once you’ve tried some of these ideas.

Feel free to forward this message along to your board if you think it will help.


5 Common Problems of Nonprofit Boards and How to Solve Them

Posted on July 2, 2009 by  
Filed under Board Governance · Tagged: , ,

As a consultant, I work with nonprofit boards that lead organizations from many sectors and of all shapes and sizes.  Despite their varying nature, these organizations face some problems that are strikingly similar.  Sometimes board members can see the symptoms but can’t articulate the root causes and they don’t realize that the solution may be an easy one. 

Step back from your board for a moment and read through the list of problems, below.  Are you familiar with the complaints described in the problem?   Can you imagine stepping through the solution? 

PROBLEM #1 – Mission Scope Creep – Over time, we’ve started to do too much for too many people.  We aren’t sure any more what our priorities are and where we should focus our time.  Things fall through the cracks and the staff is overloaded.

RECOMMENDATION – Conversations need to take place with key board and staff personnel. Chances are that you are spread too thinly – and lots of projects are not being done well or in a timely manner. Make a list of what you do.  Make sure you have the resources to manage these projects well.  Drop some projects/programs if necessary.


PROBLEM #2 – Staff and Board are out of synch. The board is working on things, the staff is working on other things, but one hand doesn’t really know what the other is doing.  Sometimes things just seem out of control.


RECOMMENDATION – Stop and assess what the staff is doing and what each of the board committees is doing.  Assign staff members to appropriate board committees.  Design an Executive Director Board Report that highlights the measurable results from the organization’s key programs and projects. 


PROBLEM #3Executive Committee does it all.  It’s just easier with fewer people.  The Executive Committee can have a meeting before the board meeting and discuss most issues and make most decisions.  Some people are doing all of the work, others don’t seem to be interested or involved.


RECOMMENDATION – Slowly phase out the Executive Committee over time and ask the board committees to come to the board meetings with crisp, direct recommendations to the entire board.  Create more involvement for all board members.


PROBLEM #4 – No clear sense of where the organization is going.  It seems like the organization is just treading water.  We have no annual objectives for the staff and no actions for the board.  We just come to board meetings and hear the same thing each month.


RECOMMENDATION – As a board, sit down with your executive staff and decide the three most critical changes that need to take place in the next year.  Decide how the board can support that activity and how it can oversee the progress and the results you want to achieve.


PROBLEM #5 – No oversight of key areas is provided by the board.  It seems that the staff is doing fine without us.  We’re not really sure what we SHOULD be doing, and we don’t want to interrupt their work when they’re so busy.


RECOMMENDATION – Think about the organization’s 3-5 key programs or projects. Decide what facts, figures, and trends you need to provide oversight and support for the essence of your organization.  At the same time, work more closely with the staff to start discussing the future.  Describe where you want to be in 5 or 10 years and determine how you can make that future a reality.