No. Under Iowa law, a nonprofit corporation is only required to have one or more board members (Iowa Code 504.803), but the IRS, on the Form 1023 Application for Exemptions, wants to see at least three board members. The Iowa Principles and Practices for Charitable Nonprofit Excellence recommends at least five board members (V.B.3).
A contract between an organization and a board member is considered a self-dealing transaction. Such transactions may be permissible but only if certain precautions are taken to minimize conflict of interest. The contract should only be approved by board members who have no personal financial interest in the transaction. If it is determined that the transaction is in the best interest of the organization and if the contract presents the best deal the organization can get with reasonable effort then the disinterested board may approve the contract. Board members may be subject to personal penalties if an organization does not take the proper precautions to ensure that self-dealing transactions do not present conflicts of interest. Organizations should be sure to draft policies to deal with both real and perceived conflicts of interest.
See The Governing Board for Iowa Nonprofits (2003), by Willard L. Boyd.
Yes. It is important that organizations take the time to create written employee policies. It is easy to forget that an important component of an organization’s successful pursuit of its mission is a positive relationship with its employees. In addition to having responsibilities to their communities, nonprofits also have responsibilities to their employees. Drafting well-thought-out employee policies can prevent conflicts that arise from misunderstandings between employers and employees. The Minnesota Council of Nonprofits recommends drafting employee policies within the first year of hiring staff. Some common topics usually addressed in employee policies are: job descriptions and organizational structure, hiring and termination procedures, salaries and benefits, substance abuse and testing, sexual harassment, anti-discrimination, absences, vacations, and holidays, employee evaluations, and grievance procedures.
Efficient management of subcommittees can prove to be elusive and requires careful balancing. Therefore, it may be best for a new board to start doing the whole job itself and appointing committees only as necessary. Effective use of committees can make the full board’s agenda more manageable, allow more time to be spent on larger issues, and allow directors to concentrate on their particular areas of competence. However, boards should use subcommittees sparingly to avoid problems with fragmentation, dual authority, and redundancy. For details see Board Source
Doing Good Better, Edgar Stoesz and Chester Raber, p. 27-29 (1997).
One responsibility of the Board of Directors is to evaluate the work of the organization's Executive Director (ED). An evaluation can help improve the confidence, support, growth and working relationship between the Board and the ED. While this review is sometimes avoided or done poorly, it represents an opportunity to identify challenges in program or performance, reward the ED, and strengthen the organization's overall administration. The ED should expect to receive a coherent view of the Board's opinion of his or her work once each year. The evaluation process will be more effective with planning. At a minimum, the evaluation should take the form of a pre-arranged discussion between the ED and the Board Chair. The evaluation should also have a written component.
See Appendix 9 of The Governing Board for Iowa Charitable Nonprofits, 2nd edition, by Willard L. Boyd for more on evaluating the executive director.
Funders need to see that your programs are valuable in order to give your organization money or other resources. Outcomes are helpful indicators of the value of your organization's programs. By showing potential funders the outcomes you aimed for, the actual outcomes, and the programming changes you made as a result, you give funders a clear idea and greater assurance about how their resources will be spent by your organization.