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Governance in Nonprofits: What It Means and How Boards Can Adapt in the COVID-19 Era


 What is governance in a nonprofit organization and what is the board of directors’ role?

Governance plays a role in all organizations, and a nonprofit is no exception. In a nonprofit organization, governance involves not only how the organization is led but also how decisions are made with a commitment to integrity and in the best interests of the nonprofit’s mission.

Nonprofit governance starts with the board of directors. The board of directors is responsible for the following governance areas: [1], [2]

  • Determine the nonprofit’s policies and goals
  • Decide how the nonprofit will address major transactions
  • Verify that the nonprofit maintains internal controls to prevent any misappropriation of assets or fraudulent transactions
  • Manage risks
  • Act as a resource for staff or volunteers
  • Monitor performance
  • Review annual budgets and plan for the future

Verify that the organization has the appropriate resources (both human and financial) to carry out the organization’s mission

In addition to the above responsibilities, a nonprofit’s board of directors plays a vital role for the organization: carrying out the nonprofit’s mission.[3] This is one of the biggest distinctions in governance between for-profit and nonprofit entities; directors at for-profit entities work to increase profits for shareholders while nonprofit directors strive to further the nonprofit’s mission.[4]

The Role of Ethics and Compliance

It is important to keep in mind the role that ethics and compliance plays in governance for nonprofits. It is imperative to align the organization’s actions with its mission. The board is tasked with verifying that the organization acts responsibly.[5] For example, it is important that the board works to avoid conflicts of interest that may hinder the organization.[6]

Who else is responsible for a nonprofit’s governance?

While the board of directors sets the tone at the top for the nonprofit organization, the board of a nonprofit with employees is not responsible for the day-to-day activities of the organization. This job belongs to senior staff of the nonprofit.[7] The board of directors directs the strategy for the nonprofit, and the staff is responsible for carrying this strategy out.

When the board relies on volunteers to run the organization, then the board will need to take steps to ensure that volunteers understand the governance structure of the organization. The board can aim to be accessible and answer any questions volunteers may have about the nonprofit’s governance. Furthermore, volunteers should still be trained as needed,[8] and this may include training on the organization’s governance procedures.

How Can the Board Adjust Its Governance During COVID?

COVID-19 has impacted how organizations approach changes to the organization, and governance in nonprofits is no exception to this. Challenges such as remote work and access to funding may have shifted how organizations approach governance. While businesses and organizations have begun to operate with some normalcy over the past few months, the effects of COVID-19 still exist.

While the basics of governance discussed above are still relevant for the board of directors, COVID has raised additional areas that the board can implement to have a strong governance system in the organization. The below are examples of principles that a board can follow to have effective governance during the pandemic:[9]

  • Have strong communication with key personnel, which includes open dialogue
  • Ensure the organization is aware of the nonprofit’s mission so others are aware how the nonprofit’s strategy aligns with this mission
  • Build a culture that encourages members to ask questions
  • Maintain a positive work environment
  • Be transparent
  • Maintain a strong commitment to ethics, which includes following any laws or regulations as they arise during the pandemic
  • Prioritize resource development, which may include asking what role the board can play in fundraising
  • Create a dashboard to help monitor the nonprofit’s goal progress and make changes as needed to help ensure these goals are met
  • Recognize when something is not working for the organization and redirect the organization as needed
  • Maintain a commitment to education and training and reflect on what areas the board members should strive to improve as a team
  • Ask what you as a board member can do to make the board a more inclusive group
  • Recognize the contributions that the members of the organization have made despite the uncertainty and challenges they have faced
  • Update bylaws to allow for flexibility, such as allowing for meetings by telephone and video[1]
  • Create orientation materials for new staff or volunteers so everyone is aware of the organization’s mission and governance structure from the beginning of their time with the nonprofit[2]
  • Ask for feedback from volunteers so that viewpoints from outside of the organization are taken into consideration as well

[1] Robert L. Waldman, Yosef Ziffer, & Christopher N. Moran, Steering the Ship Through Choppy Waters: Nonprofit Board Duties During the COVID-19 Pandemic, Venable LLP (Apr. 6, 2020), https://www.venable.com/insights/publications/2020/04/steering-the-ship-through-choppy-waters-nonprofit.

[2] Good Governance Policies for Nonprofits, National Council of Nonprofits, https://www.councilofnonprofits.org/tools-resources/good-governance-policies-nonprofits (last visited Sept. 28, 2021). 

One change that some boards have made in addressing how COVID has impacted the organization is adding members to the board who have an appropriate understanding of the financials and risks of the organization.[12] Having these financial experts will help when addressing new and unexpected challenges such as COVID.[13] Furthermore, it may help to gather key members of staff from all areas of the organization to identify what the biggest risks are facing the nonprofit in a COVID environment.[14] This will assist the nonprofit in making sure it is still on track to meet its goals related to the mission despite the uncertainties that COVID has brought. In considering risks, it may be useful to have a contingency plan when an unexpected event such as a pandemic occurs so operations can continue with minimal interruptions.

Despite the challenges that nonprofits have faced, maintaining a commitment to governance will help guide a nonprofit in its mission.


[1] Lesley Rosenthal, Nonprofit Corporate Governance: The Board’s Role, Harvard Law School Forum on Corporate Governance (Apr. 15, 2012), https://corpgov.law.harvard.edu/2012/04/15/nonprofit-corporate-governance-the-boards-role/.

[2] Alicia Alvarez & Paul R. Tremblay, Introduction to Transactional Lawyering Practice 372 (2013).

[3] Rosenthal, supra note 1.

[4] Id.

[5] Alvarez, supra note 2.

[6] Rosenthal, supra note 1.

[7] Alvarez, supra note 2.

[8] Volunteers, National Council of Nonprofits, https://www.councilofnonprofits.org/tools-resources/volunteers (last visited Sept. 28, 2021).

[9] Joy Folkedal, Why We Need Exceptional Board Governance More Than Ever, BoardSource, (Apr. 13, 2020, 2:35 PM), https://blog.boardsource.org/blog/why-we-need-exceptional-board-governance-more-than-ever?_ga=2.19590904.1301598878.1632016536-1496005396.1631540787.

[10] Robert L. Waldman, Yosef Ziffer, & Christopher N. Moran, Steering the Ship Through Choppy Waters: Nonprofit Board Duties During the COVID-19 Pandemic, Venable LLP (Apr. 6, 2020), https://www.venable.com/insights/publications/2020/04/steering-the-ship-through-choppy-waters-nonprofit.

[11] Good Governance Policies for Nonprofits, National Council of Nonprofits, https://www.councilofnonprofits.org/tools-resources/good-governance-policies-nonprofits (last visited Sept. 28, 2021).

[12] How to Effectively Leave the Pandemic Behind, Grant Thornton, (Aug. 18, 2021), https://www.grantthornton.com/library/articles/nfp/2021/how-to-effectively-leave-the-pandemic-behind.aspx.

[13] Id.

[14] Id.

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