Nonprofit Board Term Limits: When is it Time to Go?
'I'm so glad we had this time together
Just to have a laugh, or sing a song.
Seems we just got started
and before you know it
Comes the time we have
to say, 'So long.'
So many times, I’ve tried to restrain the twitch in my eye when I am speaking with a board who has members who have served for 15 years or more. Some share this information proudly and without concern for implications of power hoarding or stagnancy.
I can’t help it.
My left eye just begins to jump…
“Legally nonprofit boards are not restricted by prescribed term limits from the IRS.” Most states require there to be a set term in number of years (1 year, 2 years, 3 years, etc.). But even with the requirement that there be terms, virtually no state sets a limit on the number of consecutive terms.” (Foundation Group, CEO’s Blog, Nonprofit Board of Directors Term Length: How Long is Too Long?, Greg McRay, EA, December 2022)
I am not sure that this is good news.
As a lifelong nonprofit professional and volunteer, I am grateful to others who give their time, treasure, and talents for charitable causes. Many nonprofits, particularly the smaller ones could not survive without these social do-gooders.
But I do believe even good things run their course. I stand firm that board members ought to serve, give, contribute, advocate and champion missions. They should do the allotted time (written in the bylaws) and roll off. There are a few exceptions. Boards of churches and start-up nonprofits in their infancy stages may need consistency and the stability of long-term board members to survive.
Here are some interesting stats from BoardSource, (Term Limits, May 2022):
87.5% of nonprofits have terms; 54 % of the 87.5 percent indicated having term limits.
The most common structure for nonprofit boards is two consecutive three-year terms.
Board Service is Like a Job and Some Members Just Don’t Cut It
Board service is a complex commitment requiring members to turn off their other responsibilities every month for a couple of hours. It means leaning in and understanding the ecosystems their organizations are operating in. It demands awareness of knowing who is in the communities their organizations are serving and diving in to learn about them. It suggests some financial competency and ability to read through bylaws to assure the board is providing great governance and stewardship of resources to grow the organization.
Board Service is not for the Weak and Feeble!
Let’s face it. Some people sign up without a full understanding of these important duties. These people cause more harm than good. They often don’t attend meetings or are not engaged when they do. Others don’t represent the organization well or are rude and dismissive of their peer members. Last, some never volunteer or fully pay their board pledges. Without board pledges and contracts, accountability is often unchecked. In these instances, and when no evaluations take place, the board is sure to be dysfunctional and ill prepared. Board term limits, at least, ensures that these folk will be on their way soon. Enforce them and show these folks to the door.
Even the IRS Favors Term Limits
I agree with the IRS, which states that “term limits are a good idea to prevent static board composition often leading to unhealthy attitudes, which can cause boards to govern out of self-interest rather than serving the community’s interests”. A nonprofit’s bylaws should include the preferred term limits and the maximum number of consecutive terms. They could specify the following as the terms for all board members:
“Each full-term is renewable, but no one may serve more than twice in a row.”
(Aprio, Board Member Term Limits and Why they’re Important, Karen Peacey, December 2021)
The bylaws can also state alternatives for directors who want to stay involved over the long term. This includes serving as Emeriti board members, Advisory Council members, or committee members. Below are some convincing reasons why having term limits makes sense.
Pros for Board Term Limits
Folks can do good work to impact the community and move on to serve other organizations, using their talents and resources to help multiple causes.
New members bring new and fresh ideas in a world that changes in the blink of an eye.
Allows boards to cycle out those who lose interest, commitment, or time to help fulfill the mission.
Grants those who want to leave, to do so gracefully.
Balances power by allowing others to move into leadership roles.
Allows committee members to rotate into new roles.
Helps to align new board members to represent communities as they evolve.
Expands the organization’s circle of influence into diverse communities.
Some may argue just as strongly that good board members are hard to find. Why boot a perfectly serving board member for someone else who may not be a dynamo?
I get that…My response is allow them to roll off for a year and return if their heart desires or stay involved in one of the ways previously mentioned. But I will surrender that there are some losses the organization and board may experience when good people roll off. Check them out below.
Cons for Board Term Limits
Loss of passionate individuals with the right expertise or skills needed to respond to fast-changing events.
Potential loss of organizational memory.
Without a dedicated pipeline for new members, attrition can become a problem if the Governance Committee cannot find qualified replacements.
Governance committee will need to work diligently to build cohesion for all members to work efficiently and with purpose.
“Can hurt an organization’s ability to expand and reach new audiences, especially in terms of diversity, equity, and inclusion (DEI).”
“With the number of boards reporting no term limits trending downward since 1994, more boards are opting for the flexibility and strategic consistency they build into their organizations’ governance structure.” (Onboard, Board Term Limits: Everything You Need to Know, Josh Palmer, February 2022)
Consider your organization’s needs and ask the relevant question:
What term length will your board members need for optimal performance?
A one-year term may not be enough time for a board member to make a meaningful contribution. Maybe a two or three-year term will give your board members ample time to get up to speed and be productive. Consider staggering terms to allow board members to roll off and on at different times. Analyzing this information should be the work of the Governance Committee. They can use a board matrix to identify the valuable skills and resources they need. They should also assess the depth and amount of work required of the board. For example, devising a new strategic plan, planning an annual gala, recruiting new board members, and merging with another organization are tasks that may require board members to serve for multiple years. Other things to consider are the right size of the board and how often the board and committees should meet.
Interview Them Before They Go
Before board members depart, it is smart to conduct exit interviews. They can offer insights into current board needs and opportunities that remaining and new board members can focus on. Exiting board members are a “treasure trove of information” (SideCar, Blog, Before They Get Away: Board Member Exit Interviews, John Barnes & Jose Triana, March 2018) that can be helpful for the future work needed to move the organization forward.
Don’t Ignore this Best Practice
Enforcing term limits is a best practice that nonprofits should not ignore. Bring in new talent and ideas. Improve the savviness of your board with technology. Allow your organization and board to keep up with trends and new ways of being. Term limits helps to encourage change and the transformation your board needs to stay relevant and healthy. This, I believe will be a win-win for any board.
There, I said it! My eye is no longer twitching.
Christal M. Cherry is a board consultant ready to assist your organization and board. Reach out to discuss adjusting your bylaws, conducting exit interviews and or helping board members understand the significance of enforcing term limits. Visit www.theboardpro.com.
Term Limits, BoardSource, May 2022
Aprio, Board Member Term Limits and Why They’re Important, Karen Peacey, December 2021
Foundation Group, CEO Blog, Nonprofit Board of Directors Term Length: How Long is Too Long?, Greg McRay, December 2022
OnBoard, Board Term Limits: Everything You Need to Know, Josh Palmer, February 2022, https://www.onboardmeetings.com/blog/board-term-limits/
SideCar, Blog, Before They Get Away: Board Member Exit Interviews
John Barnes andJose Triana, March 2018