Term Limits – Critical to Your Nonprofit Board’s Success

Recently, I ran into a nonprofit organization that had been around for over 20 years – but they had never implemented term limits for their board. As a result, a few people had been on the board since the organization was started. These “old timers” ran the organization and newly-recruited members were not able to contribute much of anything new. Needless to say, the organization was stagnant and inflexible and had lost ground year after year. The newer members were frustrated because they were unable to contribute to the organization in any meaningful way.

Term limits are critical to a board’s health because they prevent a single individual or group from monopolizing the spirit of the organization. They ensure that new ideas and approaches are explored – something that’s essential to the success of every organization. Everyone is forced off the board eventually. If your board doesn’t have term limits, I recommend you start thinking about them now. You can easily incorporate them into your board by taking these three simple steps:

1. Add term limits to your bylaws. 2. Include specific terms in your “Expectations of Board Members” when you recruit. 3. Decide on a fair way to apply term limits to current board members.

Add term limits to your bylaws. The bylaws should state the term limits for each board member. I find that a 3-year term (renewable for a single, second 3-year term) is a good length of time for people to serve on a board. Less than three years and a board member is just getting started when it’s time to leave. More than 3 years and the commitment seems daunting and can discourage new board candidates from agreeing to join.

Here’s some language you can use in your bylaws: “Each Board Member will serve for a 3-year term. At the end of the first term, there will be an option to renew for another 3-year term if both the board member and the board are happy to continue. The Board Development Committee works with each board member at the end of their term to determine if they will renew their board membership or not.”

Include term limits in your “Expectations of Board Members.” When recruiting new members, using a one-page summary of your expectations helps clarify the commitment that potential members are being asked to make. You can explain the time commitment, when and where the meetings are held, that there is an expectation of an annual financial contribution, and the term limits for joining members.

Here’s some wording that other nonprofits have used that pertains to term limits: “Commit initially to a three-year term (unless otherwise stated). There may be an option to extend this term if you are meeting the needs of the XYZ Non-Profit and XYZ Non-Profit is meeting yours.”

Decide on a fair way to apply term limits to the current board members. This is often the toughest part to implement. In some cases, boards have members who have been involved with the organization for many years and they are loathe to leave. The Board Development Committee works on this task. Your goal is to get 1/3 of the board to agree to stay on for one year, 1/3 of the board to agree to stay on for 2 years and 1/3 of the board to stay on for 3 years.

First, ask each board member privately (or in a secret ballot) if they have a preference for whether they will stay on for one, two or three years. If approximately 1/3 of your board is interested in terms ending in each of the next three years, you are ok. If you need to move some people around, then you can talk to them privately to see if they’re willing to change. If not, you can draw straws to see who stays for shorter or longer periods of time.

Finally, everyone needs to be aware of these decisions – and you should publish the “end-of-term dates” for each person on your board roster. If you are a new nonprofit, don’t forget to include term limits in your bylaws. If you are an existing organization and allow board members to stay around forever, starting thinking about term limits and how they can best be applied to your organization soon.