Church and nonprofit boards need training for effective leadership
church and nonprofit board members have important jobs: are they prepared for it?
Nonprofit boards are famous – or is it infamous? – for dysfunction. Yet these boards also rarely receive training. Is there a connection? We think so. Although board positions are usually non-compensated, they play a valuable and legally mandated role in the lives of churches and nonprofits. Training can help equip them to succeed. In this webinar, you’ll learn about responsibilities of board members – both spiritual and legal – and how to educate them to lead with effectiveness and balance.
SEMINAR PRESENTER
Max is president of Church & Ministry Compliance Consulting. He has more than 25 years of experience in insurance, financial services, compliance and governance, including more than 10 years as a church treasurer. Max served as a church compliance specialist for the California Southern Baptist Convention for six years.
OVERVIEW OF training church and nonprofit boards
This webinar, led by Max Herr, focuses on the critical importance of board training and governance for churches and nonprofits. The presentation explores the complex responsibilities of board members, highlighting the need for proper oversight, compliance, and understanding of both spiritual and business aspects of church management. While board positions are typically volunteer roles, they carry significant legal and financial responsibilities that require careful attention, training, and proactive governance.
This presentation addresses the sometimes notorious dysfunction often seen in nonprofit boards, highlighting the lack of training provided to these non-compensated but essential volunteers. Herr emphasizes that while these individuals typically serve with good intentions, their lack of business acumen and corporate compliance knowledge can lead to governance challenges.
Herr elaborates on the dual nature of churches – their spiritual mission versus their civil responsibility as organizations. He underscores the importance of well-structured governing documents, such as bylaws and policies, which are essential in outlining the board's composition, powers, and responsibilities. Also discussed is the need for regular reviews and updates of these documents to avoid ambiguities and operational chaos, especially in times of crisis, such as during the COVID-19 pandemic. Herr also points out the crucial role that board members play in financial oversight and emphasizes their fiduciary responsibilities, which cannot be delegated beyond the board itself.
By providing real-life examples of governance failures and the importance of adhering to state and federal regulations, the webinar serves as a comprehensive guide for church and nonprofit boards seeking to improve their functionality and compliance. You’ll gain a deeper understanding of board roles and actionable steps toward fostering a more effective and compliant governance structure within organizations.
The webinar underscores the importance of board training and governance in nonprofit organizations, urging church leaders to prioritize training and resources to minimize risk and enhance their operational success.
Key Points
Board Composition: Boards should be small (7-9 people), comprised of visionary members with business experience, representing diverse demographics and ages
Governing Documents: Churches must maintain three key documents articles of incorporation, bylaws, and policies/procedures manual
Business vs. Spiritual Roles: Clear separation between the pastor's spiritual leadership and the board's business oversight is crucial
Financial Oversight: Boards have a fiduciary responsibility to protect church assets, review financial reports, and prevent potential embezzlement
Compliance Risks: Failure to maintain proper governance can lead to legal issues, IRS penalties, and loss of tax-exempt status
Personnel Management: Boards must develop clear job descriptions, conduct regular evaluations, and ensure reasonable compensation practices
Risk Mitigation: Regular review of policies, understanding legal requirements, and proactive training can prevent organizational challenges
Pastor-Board Relationship: Boards should support the pastor's vision while maintaining independent oversight and preventing conflicts of interest
Continuous Improvement: Governing documents should be reviewed every two years and updated to reflect current organizational needs
Compliance Training: Recommended tools like the "Compliance Fire Drill" workshop can help boards identify and address potential governance weaknesses
Time-stamped Overview of Board Training for Churches and Nonprofit Organizations
Timestamped Overview of Webinar Recording
### 00:00:14 - 00:02:19
**Introduction by Roy Harryman**
- Welcome and introduction to the webinar sponsored by Ministry Pacific.
- Description of Ministry Pacific as insurance brokers focused on serving churches and nonprofits.
- Announcement of a free consultation offer and webinar objectives.
### 00:02:20 - 00:06:06
**Max Herr Introduction**
- Introduction of Max Herr, the speaker and president of Church and Ministry Compliance Consulting.
- Overview of the importance of training nonprofit boards, highlighting the lack of training and potential dysfunction.
- Explanation of board composition issues and the need for small, diverse boards.
### 00:06:09 - 00:10:11
**Compliance and Governance Overview**
- Discussion of the spiritual and civil (business) sides of church governance.
- Importance of having clear governing documents (Articles of Incorporation and Bylaws).
- Risks of ambiguity in bylaws leading to operational issues.
### 00:10:13 - 00:23:01
**Bylaws and Board Composition**
- Emphasis on the need for bylaws to clearly define board composition and powers.
- Importance of independent board members and avoiding conflicts of interest, especially regarding compensation.
- Recommendations for involving pastors as ex officio board members.
### 00:23:03 - 00:46:42
**Fiduciary Responsibilities and Financial Oversight**
- Board members' responsibilities for financial oversight and fiduciary duties.
- Consequences of financial misconduct due to lack of oversight.
- Examples of financial mishaps in municipalities as warnings for church boards.
- Importance of having clear financial policies and procedures to prevent embezzlement and misconduct.
### 00:46:44 - 00:50:00
**Training and Compliance Fire Drill Overview**
- Introduction to the Compliance Fire Drill workshop.
- Importance of understanding corporate governance and compliance to avoid legal and operational issues.
- How the workshop offers both an overview and in-depth reviews of bylaws and policies.
### 00:50:03 - 00:54:34
**Topics Covered in Compliance Fire Drill**
- Key topics include financial reporting, budgeting, insurance, and risk management.
- Discussion of deferred maintenance and its implication on financial liabilities.
### 00:54:41 - 00:58:13
**Personal Financial Management and Workshops**
- Mention of other workshops focused on personal financial management to encourage church giving.
- Details on the structure of the Compliance Fire Drill and follow-up evaluations.
### 00:58:19 - 01:00:21
**Q&A Session**
- Questions about board training resources, the necessity of governance documentation, and the role of pastors.
- Discussion on statutory and leadership functions of boards.
### 01:00:21 - 01:01:25
**Legal Protection for Board Members**
- Explanation of the legal protections for board members when the church is incorporated.
- Clarification of when board members might be held liable.
### 01:01:25 - 01:10:59
**Discussion on Interference in Governance**
- Strategies for managing pastors who interfere with business decisions.
- Importance of separating church governance from financial decisions to ensure accountability.
### 01:10:59 - 01:11:40
**Closing Remarks**
- Invitation to seek further assistance from Ministry Pacific for policy reviews and insurance needs.
- Thank you to attendees for participating in the webinar.
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