Common Board Committees
Nonprofit boards frequently rely on committees to improve their efficiency with ongoing tasks and activities (standing committees), and sometimes for temporary issues of significance (ad hoc committees or task forces).
It is important to remember that committees only offer information and recommendations to the board – they do not make formal decisions unless specifically granted that power by the full board.
Executive Committees exist to supplement the work of the entire board and usually consist of the board officers and, frequently, the executive director. The bylaws of an organization can allow the Executive Committee to make decisions on behalf of the board in carefully defined circumstances, e.g., in an organizational crisis or emergency.
Finance Committees are called to maintain accurate and complete financial records, including the regular presentation of financial statements to the board. They also preside over budget preparation with help from an appropriate staff representative. If an Audit Committee (see below) does not exist, the Finance Committee should take on those tasks as well.
Development (Fundraising) Committees oversee the process of raising funds and securing resources so the organization can fulfill its mission. It should be noted, however, that the entire board should participate in fundraising for the organization.
Governance (Nominating) Committees evaluate and suggest improvements for the board’s capacity and effectiveness, including the review, recommendation and orientation of new trustees. This committee should also lead the board and leadership development effort.
Programs and Services Committee
Programs and Services Committees exist to offer high-level support and direction to the various programs offered by the organization. It is very important to establish unambiguous goals and authoritative limits for this committee so it does not interfere with the day-to-day operations overseen by the organization’s lead executive.
A new best practice for nonprofits, given Sarbanes-Oxley legislation, is to have an Audit Committee, responsible for overseeing an annual external financial audit including the selection and rotation of the lead auditor, presenting the final audit to the board for approval and ensuring appropriate financial controls are in place. The Audit Committee should have at least one financial expert and none of its members should be paid by the organization.
Ad Hoc Committees or Task Forces
When an issue comes up that cannot or should not be managed by an existing standing committee, boards can create an Ad Hoc Committee or Task Force to tackle the issue and report back to the board for approval. This should be a small group of people with a focused assignment, to be disbanded upon completion of their assigned task. Examples include a Capital Campaign Committee or Special Event Task Force.