6 Charity Governance Best Practices

In general, term length for a board member is typically two to three years. Meetings typically take place quarterly (plus an annual retreat/strategy session. Committees (finance, governance, fundraising, risk) meet as needed to address specific issues.

Charity Governance Best Practices

Here are some charity governance best practices to know when considering ways to help your nonprofit make an even more significant impact. 

1. Create a Clear Mission and Vision 

Start by identifying exactly what your charity stands for and the specific purpose it serves. Your organisation’s mission statement concisely summarises what your charity does, who it serves, and the specific values that your board strives to incorporate into its decisions.

Your vision more comprehensively describes specific ways your organisation benefits the people in your community and how you hope to expand upon your current outreach in the future. A detailed vision can also include information about specific steps your board will take in the future to help your organisation reach your long-term goals. 

2. Recruit a Strong, Diverse, and Independent Board

Each elected or appointed board member should bring unique expertise and insights to the organisation. This way, everyone’s unique skills and backgrounds can complement one another to form a well-rounded and driven board that’s capable of leading the nonprofit. 

Directors are often self-starters who are confident in handling a wide range of responsibilities. If your board notices a gap in needed skills, focus on recruiting candidates who fill the gap.

3. Develop Transparent Policies and Procedures

Clearly defining how your charity operates helps prevent misunderstandings, oversights, and confusion among board members. When everyone understands their roles and responsibilities, the board can function more effectively.

Creating a comprehensive set of policies and procedures enables your board to address potential issues proactively, rather than reacting to problems after they arise. Make this information easily accessible to all stakeholders, like team members, volunteers, beneficiaries, and the general public.

4. Maintain Strict Financial Oversight

Charity boards must remain vigilant in ensuring all funds, whether raised through fundraising or received via donations, are used appropriately. Responsible financial management is key to maintaining your charity’s integrity and sustaining donor trust.

Lack of transparency or failure to meet basic financial needs can prompt supporters to reconsider their involvement. To prevent this, boards must closely monitor the organisation’s finances, from fundraising and budgeting to responsible spending. They should also produce a detailed charity annual report and conduct regular audits to verify income and expenditure are properly managed and reported.

5. Engage in Strategic Planning

Charity boards should also prioritise strategic planning to make sure the organisation performs at a high level over time. Strategic planning involves clearly defining your board’s long-term goals and making intentional decisions about how you plan to meet them. This process helps your board use resources efficiently by allocating them to specific goals or initiatives. 

6. Commit to Continuous Learning and Evaluation

Even the most successful charities have room for improvement. These improvements can involve both individual performance and the effectiveness of specific departments, committees, or other groups within the organisation. Boards and other leaders can then prioritise action plans to address ideas for obtaining better results.