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AdviceChallengesHigher EducationLeadershipNon-Profits

Higher Education and
Nonprofit Boards

By September 13, 2023No Comments

image of hands operating string puppets with the words Governing Boards below

The governing board challenges and responsibilities described in several of the previous blogs apply to higher education and nonprofit boards. However, certain challenges and responsibilities are unique to higher education and nonprofit boards. Although they can be quite similar, solution strategies are greatly affected by the organization’s mission and focus. Before addressing the challenges and responsibilities, in this blog let’s consider the diverse landscape of higher education and nonprofit organizations.

Higher Education Organizations

The higher education landscape can be quite confusing. At the most global level, there are private and public institutions, both subject to various regulations by federal and state governments and private and public accrediting agencies. Private institutions are subject to oversight and regulation by state agencies (operating under various names) set up for that purpose. Public institutions are subject to regulation by the same agencies regulating private institutions. However, because public institutions are officially state agencies, they are subject to additional oversight and input by state legislatures and governors.

Public and private institutions can offer degrees at the associate’s, bachelor’s, master’s and doctoral levels. Some (usually called community colleges) offer only associate’s degrees, others offer only bachelor’s degrees, still others offer bachelor’s and master’s degrees, and finally there are those offering bachelor’s, master’s, and doctoral degrees.

Nonprofit Organizations

Just as with higher education organizations, there is a broad range of nonprofit organizations. Yet, challenges facing their governing boards can be quite similar. The broadest categorization of nonprofits is their IRS tax-exempt status. Organizations with the 501(c)(3) designation engage in little to no lobbying of public officials while organizations with 501(c)(6) status have more flexibility. However, 501(c)(3) organizations can and do engage in broad “public education” and “advocacy” activities.

Most common in the public mind are the “mission” or “cause” nonprofits. These include, for example, American Red Cross, Crystal Bridges Museum of American Art, Mayo Clinic, NAACP, Salvation Army, St. Jude’s Children’s Hospital, National Collegiate Athletic Association (NCAA), and National GEM Consortium (formerly the National Consortium for Graduate Degrees for Minorities in Science and Engineering). These organizations are typically organized as 501(c)(3) tax-exempt organizations.

Another large category are professional societies – mostly consisting of individual members, but with some organizational members. These include, for example, American Speech Hearing Language Association, American Sociological Society, Institute of Industrial and Systems Engineers, and Society for Human Resource Management. These may be organized as either 501(c)(3) or 501(c)(6) tax-exempt organizations.

A final large category of nonprofits are trade associations which consist mostly of organizational members and seek to represent the interests of the member organizations to broader audiences – especially policy makers. Examples include Biotechnology Industry Association, Material Handling Institute, National Alliance of Manufacturers, National Association of Counties, Pharmaceutical Research and Manufacturers Association, and U.S. Chamber of Commerce. These are typically organized as 501(c)(6) tax-exempt organizations.

To differentiate members of governing boards among corporations, higher education organizations, and nonprofit organizations, I use the labels of director, trustee, and governor, respectively. In this set of blogs, I focus on higher education organizations and address the challenges trustees face in selecting CEOs, as well as communications challenges CEOs and trustees face, challenges in succession planning, trustee selection, dealing with controversy, knowing and respecting boundaries, responding to radical changes, and the impact of politics on governing boards of public universities.

Next Week: Higher Education Boards—Part 1

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