Too Small, Too Big, Just Right: The Goldilocks Size for a Nonprofit Board

Nonprofit organizations in the US often ask how big their Board of Directors should be.  Boards that are too small can fall short of their goals or stagnate, but Boards that are too big can quickly become unwieldly for governance and operations.  So, what size is the right size?  The answer depends on several factors; below are six tips for thinking about this issue.

1. Understand the importance of the Board.

The Board is the highest internal authority for a US nonprofit’s governance.  The Board of Directors oversees finances, hires and fires key personnel, and is responsible for ensuring that the organization remains true to its tax-exempt mission.  The Board is critical to the organization’s operations and is responsible for its success.  Board members owe fiduciary duties to the organization and should meet regularly and keep records of Board actions.

2. Remember that the Board acts only as a group.

Board-level decisions typically require majority approval.  For that reason, many organizations choose to have an odd number of directors to avoid tie votes.  An individual director does not have much legal power beyond voting, trying to convince other directors to vote a certain way, requesting reasonable access to books and records, and sometimes calling meetings.  As a group, however, the Board has tremendous influence over the organization—it can change the organization’s mission (within the parameters of tax-exempt purposes), replace the executive director, start or stop major projects, and more.

3. Fewer than three is too small.

The Board should be big enough that it has sufficient capacity to provide robust oversight for the organization.  A nonprofit organization with fewer than three directors is probably too small for good governance.  Although the United States Internal Revenue Code does not specify a minimum number of directors for tax-exempt nonprofits, the Internal Revenue Service regularly rejects applications for tax-exemption from new nonprofit organizations with fewer than three directors, and existing organizations whose Board size falls below three may inadvertently signal to regulators, government authorities, or potential donors that it lacks sufficient internal oversight.  On a related note, small Boards should be mindful of relationships between directors, which can become problematic for certain Board approvals.  For example, if two directors are married to each other and the Board needs to approve a financial transaction involving one of them, a small Board can be left with very few directors remaining for the approval when both the affected director and the spouse recuse themselves from that vote.  If any directors on a small Board are married or related to each other, consider expanding the size of the Board to include additional independent directors. 

4. More than fifteen might be too big.

Although the law does not set a maximum number of directors, nonprofit Boards with a lot of people sometimes have difficulty convening the group, taking corporate action, and running efficient meetings.  Boards over fifteen people sometimes choose to delegate certain Board powers to committees, which should be done in accordance with the organization’s bylaws and applicable law.  Some nonprofits have good reasons for having very large Boards and have put into place structures or procedures that allow for efficient governance including committees and subcommittees, meeting protocols, and mechanisms to allow directors whose commitment has waned to leave the Board.

5. Right-sizing the Board promotes a healthy organization.

For a new nonprofit organization, the “Goldilocks” size of the Board of Directors is often three to seven directors, and for a nonprofit that has been in existence for several years and has ongoing operations the range is often five to eleven directors.  The right number depends upon the size of the organization, the complexity of its operations, and the qualities or contributions that Board members or potential Board members bring to the table.  Some organizations choose a bylaws provision that will allow a range for the number of authorized directors, such as “no fewer than five and no greater than eleven” directors.  This allows the organization to add and remove directors within that range without amending the bylaws.

6. Follow procedure for adding or removing directors.

The number of authorized directors is almost always included in an organization’s bylaws, expressed as an actual number or a range.  If an organization determines that its Board should grow or shrink, it must follow is its own bylaws for adding or removing directors, and expanding the number of authorized directors if applicable.  Failure to follow procedure is a common mistake for inexperienced Boards.  Someone moves away, so the group assumes that person is not on the Board anymore. However, that person is still technically a Board member, and so still has fiduciary duties to the organization and needs to be counted for Board votes.  A volunteer steps up significantly, and someone from the Board invites that person to start joining Board meetings. However, if they not properly added to the Board, their votes will not be legally valid.  Good corporate governance requires an organization to follow procedure for adding and removing directors—typically a vote of existing directors or voting members—and those steps should be documented in the organization’s records so that the Board roster is always up to date.    

Overall, the organization should stay true to its own needs.  Nothing here is a hard and fast rule.  A Board of five people may be “too big” if not all of them are committed to role.  A Board of 25 people may have systems and structures in place to run like a well-oiled machine.  The best nonprofit Boards are not identified by a particular number of members, but rather but a commitment to the role and its responsibilities and a dedication to the nonprofit organization’s work.  For more information on what nonprofits should look for in potential Board members, see Time Talent Treasure: Advice for Nonprofits on Choosing Board Members.