The structure of a nonprofit organization depends on factors like where it was incorporated and what the nonprofit is trying to achieve. However, there are some basic organizational features and roles that are found in most nonprofits.
A nonprofit will typically include governance and administrative functions, as well as various programs. Then, it will have certain roles within its structure to carry out these functions. These roles include volunteers, admin staff, management, executive staff, the board, and the chairman of the board.
This typical structure provides a good framework to use when deciding how to structure your nonprofit.
The structure of most nonprofit organizations will include three major aspects. These are governance, administration, and the programs and work.
The governance of a nonprofit is the part of the nonprofit that oversees the entire operation.
Governance refers to the organizational function of setting the organization's long-term goals, objectives, and overall direction. It also involves providing the guidance and controls necessary to help the organization achieve these goals and objectives.
It is common for people to equate the governance function of a nonprofit organization with the roles and responsibilities of the board. The board does play a big role in the governance of a nonprofit organization. However, top management also plays an important role here.
Successful nonprofit governance actually depends a lot on a strong and effective working relationship between top management and the board.
The governance part of a non-profit organization identifies the overall purpose or mission of the organization. The programs, on the other hand, are how the organization achieves its purpose.
A typical nonprofit organization will include various programs. Each program will have its own objective that helps contribute to the organization's overarching objectives.
It helps to think of a program as having an input, process, and output. A program's input is the resources it uses. Think money, staff, facilities, etc.
The process is, quite simply, how the program uses its resources to achieve its objective. For example, creating art, counseling clients, looking after children, holding fundraisers, etc.
The outcome is the product of the process. For example, the pieces of art that have been created, the number of clients counseled, the number of children cared for, or the money raised by the fundraiser.
It is difficult for programs to achieve their objectives and the nonprofit to achieve its overall mission without a central administrative system that makes it all possible.
The central administration part of a nonprofit organization is the facilities and staff that manage the different programs and ensure the organization runs smoothly. For example, the administration of a typical nonprofit organization includes office personnel and the executive director.
Note that nonprofits generally try to minimize costs wherever possible. As such, they will usually try to decrease their administrative costs so that more resources can go toward the programs.
The aspects of a standard non-profit structure are made up of several key roles:
The board is a body of individuals who are collectively tasked with the overall running of the nonprofit. They are responsible for the organization's policies and overall direction.
A board will usually be divided into various committees. These committees have to deal with different issues like fundraising, budgeting, nominations, and various programs.
The powers of the board are set out in the organization's governing document (which usually takes the form of articles of incorporation). This means that boards in different organizations might have different powers.
However, the board is responsible for the organization's overall mission and policies. They need to choose the best organizational structure that will help the nonprofit achieve its mission.
Members of the board are not allowed to receive any monetary compensation in return for their service. Therefore, they are usually individuals from the community who want to help improve their community.
The chairman of the board essentially coordinates the work that is done by the board, its committees, and the executive director. They ensure that everything runs smoothly and help facilitate discussions and decisions.
In some organizations, the chairman of the board may play a role in appointing members of the committees. The powers of the chairman can usually be found in the organization's bylaws.
Most nonprofit organizations will have an executive director (sometimes called the CEO or President). Their responsibility is to carry out the wishes of the board.
It is also common for nonprofits, especially larger ones, to have other executive staff members, like a CFO and COO. The executive staff of a nonprofit organization play similar roles to those found in your typical private company.
Most nonprofits will have a management team and general staff. The management team typically works with the board and general staff to help the nonprofit achieve its objectives, both big and small.
The general staff's daily tasks depend on the needs and objectives of the organization.
The admin staff is the staff that deals with the administrative side of things. They support the running of the company by completing administrative tasks. For example, answering phone calls and emails, taking minutes, operating office equipment, and scheduling meetings.
Volunteers are unpaid individuals who are there to help in a number of different ways. They typically serve on committees or help out in the programs.
Having a great volunteer team can make the world of difference to the success of a nonprofit’s programs.
Non-profit organizations make up a significant portion of our economy, with over 1.5 billion NPOs registered in the USA alone. All of these have one thing in common: they aim to make the world a better place. And to do so, they need to have a structure that allows everyone to work together to achieve their common goals.
The structure of a nonprofit depends on factors like the organization's size, resources, and overall mission. However, you will usually find that they are split into similar segments (governance, administration, and programs). By now, you should have a better understanding of these features and roles and why they are so important in nonprofit organizations.