Build a Better Nonprofit Board With Term Limits

September 21, 2023

Are the board members of your non-profit subject to term limits? If not, you should think about implementing what is often considered a best practice.

Over time, some board members may lose interest in the job, or they may become unproductive or even disruptive. Negative board attitudes can quickly filter down and hurt your organization’s activities and initiatives, not to mention its finances. On the other end of the spectrum, there are the board members who devote so much time and energy to your nonprofit that they risk becoming burnt out. Term limits allow all of these board members to exit gracefully.

Advantages and Disadvantages

A significant benefit of term limits is that they can help your nonprofit gradually establish a more diverse board. They make it easier to ensure that your board represents the community’s gender, racial, economic, religious, and other demographic groups by allowing you to add people with certain skills and viewpoints (such as financial or political expertise), as needed. As board vacancies become available, you can broaden your circle of invested stakeholders beyond the typical core group of volunteers.

Another benefit of term limits is that they prevent “power hoarding”, which can arise when authority is concentrated in the hands of a small, entrenched group. Such cliques can scare new members, as well as existing workers, and stymie necessary change. Regular turnover allows for the removal of dominant individuals and can improve collaboration.

Term limits may also impede insider fraud. Long-term board members who are familiar with the nonprofit’s nuances and internal controls may find it easier to circumvent safeguards and conceal fraudulent practices.

However, term limits may have certain drawbacks, such as the potential loss of institutional knowledge, skills, and donations from board members and their networks. You may also lose a considerable number of volunteer hours. Regular turnover necessitates an increase in both time and resources. You’ll need to find, attract, and train new members on a regular basis, as well as establish a team rapport that is essential for collaboration.

Defining Terms Limits

If you think setting term limits is an appropriate move, you’ll first need to set some ground rules. Adopting terms that are too long may prevent new members from applying. Terms that are too short, on the other hand, do not provide members with enough time to make meaningful contributions, especially when combined with strict limits on the number of terms a member can serve. Short terms also necessitate frequent elections.

For example, you may permit two consecutive three-year terms or a total of six years with a one-year break between terms. Structure it so that just one-third of the board leaves at a time to reduce the amount of disruption. Consider granting emeritus status or forming advisory boards to keep departing board members involved and increase cohesiveness.

Changing Bylaws

Term limits must be carefully established in your bylaws if they do not already exist. Contact us if you need assistance or to discuss other governance issues.