News for Massachusetts-based nonprofits and nonprofit board members from the Massachusetts Nonprofit Network! Nonprofit board members may now receive a stipend of up to $500 without losing statutory protections; annual gross support and revenue thresholds for charities submitting financial statements raised to $500,000 for reviewed statements and $1,000,000 for audited statements. BOSTON – In an effort to encourage job creation and growth in Massachusetts, the Legislature recently passed, and Governor Healey signed, H5100, an Act relative to strengthening Massachusetts’ economic leadership. This legislation encourages representation on boards by allowing a small stipend for board volunteers, and supports nonprofits through updated requirement thresholds. Nonprofit board members may now receive a stipend up to $500 for their time and efforts related to board service without losing state statutory civil liability protections. Previously, if a nonprofit board member received compensation, they would not be entitled to the personal civil liability protections afforded by Massachusetts General Law Chapter 231 Section 85W. This change was proposed by the Massachusetts Nonprofit Network (MNN), and is in line with the Federal Volunteer Protection Act, which provides similar protections for nonprofit volunteers so long as they are not compensated more than $500. “Allowing board members to receive a modest stipend for their time and effort will do a great deal to advance equity and representation for nonprofits and the people they serve,” said MNN’s CEO, Jim Klocke. “This provision enables nonprofits with smaller budgets to encourage board participation from individuals who may not otherwise be able to serve because of financial constraints. MNN hopes that with the allowance of a stipend, nonprofit boards will gain valuable voices and improve board representation.” Additionally, Massachusetts raised the thresholds for requiring nonprofits to submit reviewed or audited financial statements. Now, organizations that have gross support and revenue of more than $500,000 in a fiscal year (compared to $200,000 previously) must submit financial statements that have been reviewed or audited by an independent certified public accountant (CPA). Whether the statements must be audited or reviewed now depends on whether the gross support and revenue exceeds $1,000,0000 (compared to $500,000) in that year, with audits required for those with $1 million or more. “MNN applauds the Legislature for recognizing the need to raise the thresholds, as they were last updated in 2008,” said Klocke. “Inflation and rising costs are straining nonprofits. This legislation alleviates a costly requirement and will have a real and important impact on smaller to medium-sized nonprofits.” Please use the Massachusetts Nonprofit Network as a resource for support as these changes are implemented. #massachusetts #nonprofits #nonprofitboard #nonprofitleadership #nonprofitnews #equity
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Good Deeds Canada: Empowering the Nonprofit Sector Through Volunteerism According to recent data from Statistics Canada, the nonprofit sector significantly contributes to Canada's economy and social fabric, employing millions and driving substantial economic activity. This sector's success heavily relies on volunteerism, which is where Good Deeds Canada steps in. Good Deeds Canada, with its innovative approach to rewarding volunteers with deed dollars, is making a notable impact by addressing the sector's critical need for dedicated volunteers. Good Deeds Canada’s model directly supports the findings in the Statistics Canada report. By incentivizing volunteerism, Good Deeds Canada ensures that nonprofit organizations have a steady stream of committed volunteers, which is essential for their operations. This alignment with the sector's needs helps nonprofits operate more efficiently, thereby maximizing their economic and social contributions. The reward system not only motivates individuals to volunteer but also enhances volunteer retention, which is crucial for the sustainability of nonprofit activities. In essence, Good Deeds Canada exemplifies how targeted initiatives can bolster the nonprofit sector, as highlighted by Statistics Canada's data. By addressing volunteer scarcity through innovative rewards, Good Deeds Canada enhances the sector's capacity to meet its diverse challenges and opportunities. This synergy between data insights and practical action drives positive change, reinforcing the nonprofit sector's vital role in Canadian society.
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Most nonprofits fail to track this one crucial metric (and how CPAS changes that). You might think your nonprofit is doing everything right: -tracking donations -monitoring program outcomes -keeping an eye on staff efficiency But there’s one metric that often goes unnoticed, and it’s the key to unlocking true, sustainable impact. It’s all about ‘Stakeholder Engagement’. Most organizations focus heavily on the services they provide, but what about the people who make those services possible? Stakeholders—whether they’re donors, volunteers, or community partners—are the lifeblood of any nonprofit. Yet, tracking their engagement often gets pushed to the back burner. Here’s why that’s a problem: When you fail to monitor stakeholder engagement, you’re missing out on critical insights. 1. Are your donors truly invested in your mission, or are they just giving out of habit? 2. Are your volunteers feeling connected and valued, or are they burning out? 3. Are your community partners actively collaborating, or are they drifting away? Without a clear understanding of these dynamics, your nonprofit could be losing valuable support without even realizing it. That’s where CPAS comes in. The Contract Performance Analysis System (CPAS) isn’t just a tool for tracking services and staff efficiency. It’s a game-changer for understanding stakeholder engagement. CPAS provides real-time data on how engaged your stakeholders are, helping you identify trends, spot potential issues, and take proactive steps to strengthen these vital relationships. Here’s how CPAS helps you focus on what really matters: 𝗘𝗻𝗵𝗮𝗻𝗰𝗶𝗻𝗴 𝗖𝗹𝗶𝗲𝗻𝘁 𝗥𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀𝗵𝗶𝗽𝘀: CPAS allows you to efficiently manage client interactions and services through its Client Management and Activity Tracking features. By maintaining detailed records of each client’s engagement and service history, you can ensure that their needs are met consistently and effectively. This personalized approach strengthens client relationships and improves the overall impact of your nonprofit’s programs. 𝗦𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻𝗶𝗻𝗴 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝘁𝘆 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽𝘀: CPAS’s comprehensive reporting tools, including Adverse Childhood Experiences Reports, Community Resource Connector Reports, and Quarterly Reports, offer valuable insights into the progress and effectiveness of your community collaborations. By using System Reports to manage audits and track outcomes, you can ensure that your partnerships are productive and aligned with your mission, fostering a more resilient and connected network for your nonprofit. By keeping a pulse on stakeholder engagement, you’re not just improving your nonprofit’s performance—you’re building a stronger, more resilient organization. Most nonprofits overlook this crucial metric. But you don’t have to. P.S) Repost this if you believe stakeholder engagement is key to nonprofit success.
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5 Reasons Why Nonprofits Fail in Idaho Starting a nonprofit in Idaho can be challenging, but understanding the common pitfalls can help you build a sustainable organization. Before we dive into the steps, if you're looking to start a nonprofit in Idaho, Rooney's Nonprofit Starter Pack is here to guide you through each step of the startup process, including raising funds to get your nonprofit up and running. 1. Lack of clear strategic planning: A lack of clear strategic planning is a major reason nonprofits fail in Idaho. Idaho's unique socioeconomic landscape requires nonprofits to understand the specific needs of their communities and tailor their programs accordingly. To avoid this pitfall, invest time and resources in creating a detailed strategic plan that outlines your goals, target audience, strategies, and metrics for success. 2. Inadequate funding: Nonprofits in Idaho often face challenges in securing adequate funding, which can lead to insufficient fundraising and financial management. Competition for grants and donations can be fierce, particularly for smaller organizations. To overcome this obstacle, explore various funding avenues, including grants, individual donations, corporate sponsorships, and earned income from fee-for-service programs. 3. Inadequate board governance Inadequate board governance can also lead to nonprofit failure. The board of directors plays a crucial role in guiding the nonprofit's direction and ensuring its financial health. In Idaho, where the nonprofit sector is relatively small, finding qualified and engaged board members can be difficult. To build a strong board, seek out individuals with diverse skills and experience who are passionate about your mission. 4. Failure to Adapt Failure to adapt to changing needs can also lead to nonprofit failure. Idaho's demographics, economy, and community needs are constantly shifting, and nonprofits must adapt to stay relevant. To stay ahead of the curve, regularly evaluate your programs and services to ensure they meet the evolving needs of the communities you serve. Be open to new ideas and approaches, and embrace change and innovation. 5. Marketing and Outreach Finally, underestimating the importance of marketing and outreach can lead to nonprofit failure. Building awareness of your mission, engaging with potential donors, and communicating your impact are essential for long-term sustainability. By understanding these common reasons for failure and proactively addressing them, you can build a sustainable nonprofit in Idaho that makes a lasting impact on the lives of Idahoans. Thanks for watching! If you found this video helpful, please subscribe to our channel for more nonprofit tips and resources. Share this video with someone who's making a difference in Idaho, and let's build a stronger nonprofit community together! Visit Nonprofit-school.com to learn more.
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How a Nonprofit Can Own a For-Profit: Legal Framework and Benefits PT.1 Nonprofits traditionally focus on social, educational, or charitable missions, leveraging donations, grants, and volunteer efforts to sustain their activities. However, as financial landscapes evolve, many nonprofits explore innovative strategies to enhance their impact and financial stability. One such strategy involves owning a for-profit subsidiary. Let's jump in Understanding the Basics: Nonprofit vs. For-Profit Entities 1. Nonprofit Organizations: - Mission-Driven: Nonprofits exist to fulfill a charitable, educational, scientific, or religious purpose. - Tax-Exempt Status: They often qualify for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code (IRC), meaning they do not pay federal income tax on income related to their exempt purposes. - Profit Distribution: Earnings cannot benefit private individuals or shareholders; profits must be reinvested in the organization’s mission. 2. For-Profit Entities: - Profit-Driven: For-profits exist primarily to generate profit for their owners or shareholders. - Taxable: Subject to federal, state, and local taxes on their earnings. - Profit Distribution: Profits can be distributed to owners or shareholders as dividends or reinvested in the business. Legal Framework for Nonprofits Owning For-Profits 1. Permissibility: - Nonprofits can own for-profit subsidiaries. The IRS and state laws generally permit this, provided the subsidiary's activities align with the nonprofit’s mission and do not jeopardize its tax-exempt status. 2. Formation and Structure: - Subsidiary Structure: The most common structure is a parent-subsidiary relationship where the nonprofit acts as the parent organization, and the for-profit operates as a wholly-owned subsidiary. - Corporate Form: The for-profit subsidiary can take various corporate forms (e.g., corporation, LLC), depending on the strategic needs and regulatory environment. 3. Tax-Exempt Status Protection: - Unrelated Business Income Tax (UBIT): Nonprofits must be cautious of UBIT, which taxes income from activities not substantially related to the nonprofit’s exempt purpose. The for-profit’s activities must either be related to the nonprofit’s mission or be structured to minimize UBIT implications. - Arm’s Length Transactions: All transactions between the nonprofit and its for-profit subsidiary must be conducted at arm’s length to avoid conflicts of interest and ensure fair market value. 4. Operational Independence: - The for-profit subsidiary should operate independently, with its own board of directors and governance structures to maintain clear legal and operational separation. 5. Legal and Regulatory Compliance: - Both entities must comply with applicable federal, state, and local laws, including corporate governance, tax filings, and reporting requirements. Regular audits and legal reviews can help ensure compliance. PT. 2 soon
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Let’s talk… about leading a nonprofit. Running a nonprofit is hard. Not only do you have all the obligations of a for profit company, but you also have added obligations to the community. In a manner of speaking, nonprofits belong to the community. The community enters into an agreement that a nonprofit will be given certain privileges (think tax breaks) in return, the nonprofit will do something (think mission- care for the poor, keep the environment clean, etc) for the community. Nonprofit boards have been tasked with making sure that this agreement is upheld. That is why nonprofit boards have additional responsibilities- in a for profit board- members are worried about securing a financial return for investors- they have no obligation to the broader community. This paradigm changes the conversation that nonprofit leaders have with board members. It means that in addition to financial statements, there is a need to show programmatic outcomes- how is the community getting better because of the mission? And Non profit leaders need to show how fundraising is impacting the success of the organization. Donors represent the community as investors and nonprofit board members are obligated to make sure that these dollars are being invested in the best way possible. Too often conversations about fundraised dollars aren’t looking at the complete impact of fundraising. This is because fundraising conversations have relied on horrible metrics: Total Dollars Raised and Cost to Raise a Dollar. Why are these metrics horrible? Total Dollars Raised is horrible because it is a lagging indicator of program success. It shows what happened- past tense- it doesn’t look forward and it doesn’t provide an opening for conversation on how to make it better. It merely reports. It provides no insight into how an organization is doing or if they are improving. Cost to Raise a Dollar- I hate this metric. Whoever thought this thing up should be taken into town square and put in one of those head/ hand wood things and be made to stay there for a week. Why on earth would you highlight a metric that routinely shows that the best thing you can do for you fundraising program is to eliminate it by cutting expenses? It doesn’t make any sense. There has to be a better way. And there is. To truly talk about your fundraising success you need to look at leading and lagging indicators of success. The folks at Board Source (link to article in the comments) have done a great job of framing up a better set of metrics to define fundraising success. This is part of a new way for nonprofit leaders, board members, and community partners to look at philanthropy. Want to learn more? Go over to www.amponow.com to see what’s happening. Stay tuned…. AMPO is just getting started.
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How to Start a Nonprofit in Kentucky Starting a nonprofit in Kentucky can be a rewarding journey, but it can also be complex and challenging. Have you ever wondered how to start a nonprofit in Kentucky? Before we dive in, if you're looking to start a nonprofit in Kentucky, Rooney's nonprofit starter pack is available to guide you through each step of the start-up process, including raising funds to get your nonprofit up and running. Here are the steps to start a nonprofit in Kentucky: Step 1: Choose a Name Choosing a name for your nonprofit is an important first step. Your name should be unique, memorable, and reflect the mission and purpose of your organization. Make sure to check with the Kentucky Secretary of State's office to ensure that your name isn't already in use. Step 2: Build Your Team Building a strong team is essential for any nonprofit. This includes your board of directors, officers, and any other key staff members. Your team should be passionate about your mission and have the skills and expertise needed to help your nonprofit succeed. Step 3: Appoint a Registered Agent You'll need to appoint a registered agent who will receive legal documents on behalf of your nonprofit. This can be an individual or a business entity that is authorized to do business in Kentucky. Step 4: File Articles of Incorporation Next, you'll need to file Articles of Incorporation with the Kentucky Secretary of State's office. This document will include basic information about your nonprofit, such as its name, purpose, and structure. Step 5: Obtain an EIN After you've filed your Articles of Incorporation, you'll need to obtain an Employer Identification Number (EIN) from the IRS. This is a unique identifier that will be used to track your nonprofit's financial activity. Step 6: Establish Bylaws Your bylaws will serve as a guide for how your nonprofit will operate. They should include information about your nonprofit's structure, governance, and decision-making processes. Step 7: Hold an Initial Meeting Once you've established your bylaws, you'll need to hold an initial meeting with your board of directors. This meeting should include the election of officers, the adoption of bylaws, and the establishment of a bank account. Step 8: Apply for 501(c)(3) Status To be eligible for tax-exempt status, you'll need to apply for 501(c)(3) status with the IRS. This can be a complex and time-consuming process, but it's essential for nonprofits that want to be eligible for grants & donations. Step 9: Register for Charitable Solicitation Finally, you'll need to register for charitable solicitation with the Kentucky Attorney General's office. This will allow you to legally solicit donations from the public. By following these steps, you can establish a successful nonprofit in Kentucky that makes a lasting difference in your community. Together, let's build a stronger nonprofit community in Kentucky! #nonprofit #Kentucky #startanonprofit #501C3 #charity #impact
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ALERT! Long post on nonprofit sector reform incoming! If you work with small to midsize nonprofits there's no way you haven't noticed the high turnover of staff, the dearth of fiscal sustainability, and the challenge of finding and retaining staff, especially Development staff. These issues are endemic to the industry and not isolated incidents. The nonprofit industry, especially small to midsize organizations, are in crisis and need a massive structural overhaul. Here's what I see: The issues the nonprofit sector faces stem from structural and systemic challenges, including financial instability, governance accountability, and unsustainable work environments. To address these, clear reforms are needed, including: 1. Regulating and Holding Boards of Directors Accountable Board members should be required to procure certification and governance training, public reporting on board activities should be required, and 6 months of financial reserves should be a pre-requisite to maintaining nonprofit status. Policy to implement stronger state and federal regulation of nonprofits and more implementation of penalties for misconduct should occur. 2. Regulating Finances and Ensuring Fiscal Sustainability State and local governments should establish dedicated public funding streams and expand tax incentives for small-dollar donations. Nonprofits should be required to build reserves or endowments and explore social enterprise models for diversified income. 3. Limiting the Influence of Philanthropy on Direction, Strategy, and Sustainability Policies should cap donation amounts to prevent over-reliance on large donors, and reform Donor-Advised Funds (DAFs) to mandate stricter payout rules. Tax policies should be adjusted to encourage broad-based giving over large donations from the wealthy. 4. Structural Changes to Ensure Shared Best Practices Policies should be implemented to financially incentivize organizations to share best practices and participate in sector-wide data-sharing infrastructure to improve efficiency. Supporting consolidation efforts can reduce redundant services and enhance overall impact. 5. Accountability for Foundations and Wealthy Philanthropists The foundation payout requirements should be increased beyond the current 5% and policies should limit the control funders have over nonprofit strategies. This ensures more funds are distributed and nonprofits remain mission-aligned with community needs. 6. Nonprofit Worker Rights Laws should be enacted requiring living wages, benefits, and better working conditions for nonprofit workers. Policies protecting unionization should be implemented to create more fiscally and emotionally sustainable nonprofit environments. Just my theory, but I believe by blending regulations with strategic reforms that empower communities and nonprofit employees, the sector can become more resilient, accountable, and independent from the volatile influence of philanthropy alone.
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HOW TO START A NONPROFIT IN ILLINOIS Ready to Make a Difference in Illinois? Starting a nonprofit in Illinois can be a rewarding journey, but it can also feel overwhelming. Where do you begin? Before we dive in, if you're looking to start a nonprofit in Illinois, Rooney's nonprofit starter pack is available to guide you through each step of the start-up process, including raising funds to get your nonprofit up and running. Back to the steps to start up a nonprofit in Illinois: First, choose a name that resonates with your mission and is available in Illinois. This is a crucial step, as your name will be the face of your organization. Take your time, and make sure it's a name that reflects your values and purpose. Next, build your team by recruiting an incorporator and assembling a diverse board of directors. Your board will be responsible for making important decisions, so choose individuals who share your vision and are passionate about your cause. Once your leadership team is in place, appoint a registered agent in Illinois to receive legal documents on behalf of your nonprofit. This person will be responsible for receiving important documents, such as tax filings and legal notices. Then, file the Articles of Incorporation to make your organization official. This document will include basic information about your nonprofit, such as its name, purpose, and structure. After incorporation, obtain a federal Employer Identification Number (EIN) and state tax identification numbers. These numbers will be used to identify your nonprofit for tax purposes. Establish bylaws to outline your nonprofit's governance and operations. Bylaws will serve as a guide for your board and staff, ensuring everyone is on the same page. Hold an initial meeting to approve your bylaws, appoint officers, and open a bank account. This meeting is a crucial step in setting up your nonprofit's operations. Apply for 501(c)(3) status with the IRS to gain tax exemption and access to grants and fundraising opportunities. This status will also exempt your donors from paying taxes on their donations. Register for charitable solicitation in Illinois to legally raise funds. This registration will allow you to solicit donations from the public. Finally, check for any local licenses or permits you might need, and stay on top of annual filing requirements to maintain your nonprofit's good standing. Starting a nonprofit in Illinois requires careful planning and execution, but with dedication and perseverance, you can make a lasting difference in your community. Remember, starting a nonprofit is just the first step. The real work begins when you start serving your community and making a positive impact. Thanks for watching! If you found this helpful, please: Subscribe to our channel for more nonprofit tips and resources! Hit the like button and share this video with your network!
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HOW TO START A NONPROFIT IN INDIANA Ready to Make a Difference in Indiana? Starting a nonprofit in Indiana can be a rewarding journey, but it can also feel overwhelming. Where do you begin? Before we dive in, if you're looking to start a nonprofit in Indiana, Rooney's nonprofit starter pack is available to guide you through each step of the start-up process, including raising funds to get your nonprofit up and running. Back to the steps to start a nonprofit in Indiana: First, choose a name that resonates with your mission and is available in Indiana. This is a crucial step, as your name will be the face of your organization. Take your time, and make sure it's a name that reflects your values and purpose. Next, build your team by recruiting an incorporator and assembling a diverse board of directors. Your board will be responsible for making important decisions, so choose individuals who share your vision and are passionate about your cause. Once your leadership team is in place, appoint a registered agent in Indiana to receive legal documents on behalf of your nonprofit. This person will be responsible for receiving important documents, such as tax filings and legal notices. Then, file the Articles of Incorporation to make your organization official. This document will include basic information about your nonprofit, such as its name, purpose, and structure. After incorporation, obtain a federal Employer Identification Number (EIN) and state tax identification numbers. These numbers will be used to identify your nonprofit for tax purposes. Establish bylaws to outline your nonprofit's governance and operations. Bylaws will serve as a guide for your board and staff, ensuring everyone is on the same page. Hold an initial meeting to approve your bylaws, appoint officers, and open a bank account. This meeting is a crucial step in setting up your nonprofit's operations. Apply for 501(c)(3) status with the IRS to gain tax exemption and access to grants and fundraising opportunities. This status will also exempt your donors from paying taxes on their donations. Register for charitable solicitation in Indiana to legally raise funds. This registration will allow you to solicit donations from the public. Finally, check for any local licenses or permits you might need, and stay on top of annual filing requirements to maintain your nonprofit's good standing. Starting a nonprofit in Indiana requires careful planning and execution, but with dedication and perseverance, you can make a lasting difference in your community. Remember, starting a nonprofit is just the first step. The real work begins when you start serving your community and making a positive impact. Thanks for watching! If you found this helpful, please: Subscribe to our channel for more nonprofit tips and resources! Hit the like button and share this video with your network! Follow us on social media for the latest updates and insights!
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A common (and mistaken) belief in nonprofit board recruitment is that more is better. If the organization has more board members, more work will get done and more money will be raised. Wrong. It's counterintuitive but having a smaller board is better for engagement, accountability, and productivity. It creates an overall more positive experience for board members which helps with retention. The "ideal" nonprofit board size is around 9-11 people. This will be surprising for many but if you think about it, it's always the same core people on the board carrying the majority of the work being done. Not everyone needs to serve on the board of directors or trustees to contribute to the organization in a leadership capacity. This is why committees are great! Having a development/fundraising committee to engage large donors and fundraising volunteers is a perfect fit. Board governance is a higher level of responsibility, time, and financial commitment; because someone is a major donor, it is not a good reason alone to ask them to serve on the board. Your organization can create other structures like honorary councils, etc. to recognize those folks and involve them in the organization. Board service should focus on board governance - setting direction, providing oversight, and ensuring necessary resources. Stop using the terms "working" boards and "fundraising" boards. All boards have a responsibility to work (maybe in different ways) and ensure necessary (financial) resources. Who is on your board, how they work, and how they fundraise may look different based on organizational and board lifecycles (yes, boards have lifecycles just like organizations do) but these terms are outdated and inaccurate. These aren't good reasons for bigger board sizes. It really is all about who not how many people are on your board. It's easier for board members to hold each other accountable when there aren't so many people on the board. Too many people on the board and folks get lost in the mix. This week I had a board member say to me, "Why I am even on this board? It's like I don't do anything and they don't need me." Board members should feel needed, wanted, and engaged; it becomes much harder to do that when there are a plethora of board members. It's easier to disappear and hope others do the work on a larger board. Before recruiting board members, develop a strong and documented recruitment process that begins with a board self-assessment. Ask current board members what is working about their board experience and engagement; learn what isn't working. You may find that adding board members isn't the answer but that putting more time and energy into engaging the existing board members is the way to go. I would rather have 10 very engaged board members doing what they signed on to do than 25 board members who demonstrate a variety of engagement levels. Consider what kind of board members you need for success, rather than how many you can recruit.
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