Not-for-Profit Notebook

Practical insight and analysis on the accounting, audit and tax issues impacting not-for-profit organizations.

Are Nonprofit Board Term Limits Right For You?

In one of our previous posts, we discussed toxic behaviors that often warrant firing a board member. Having an ineffective board of directors is not an option for a successful nonprofit, but removing a board member can be awkward and difficult.

As a solution, consider term limits for your board members. They can allow you to easily dismiss difficult board members and hire people with new perspectives. At the same time, limits also can cause you to lose the best sooner than is prudent. Consider some of the pros and cons before making a decision.Term Limits

Pros of Term Limits

Nonprofit board term limits allow you to remove inactive or difficult board members politely and, hopefully, without damaging the relationship. They also can create an opportunity for new board members with fresh ideas and perspectives to join as well as provide flexibility as your organization grows. Suppose, for example, that a board member’s term is expiring and a key initiative is to replace outdated technology. This is an ideal time to add a new board member with significant technology expertise.

Term limits can help board members, too. By knowing in advance that their terms will be expiring, they can move on to other nonprofit boards without feeling guilty. And they can exit gracefully if age or life-changing situations affect their participation.

Cons of Term Limits

In some circumstances, term limits do more harm than good. First, your organization may have to look for qualified and dedicated volunteers every few years — which can be difficult and time consuming. Also, term limits require your board and organization to commit to an endless cycle of new member training. This can diminish your board’s return on its training investment. By the time a member becomes a valuable asset and is effective, his or her term may conclude.

What’s more, you may sacrifice your most dedicated members. Although ideally all board members contribute significantly and equally, nonprofits often have a few members that perform the bulk of the board’s work. Losing one of these key people can be devastating. Last, you may lose institutional knowledge and organizational history when founding and experienced members leave.

Term Limits are not your Only Option

If term limits aren’t appropriate for your organization but you want to ensure board members are active and engaged, think about developing an advisory committee to evaluate members and assess their ongoing interest.