Typically, nonprofit board members are elected for a specified period of time, called a term. Terms can be structured as either successive or staggered. Successive terms are those which all end at the same time. Meaning, all board members are up for election in the same year. In contrast, staggered terms are those which do not all end at the same time. Instead, only a select number of board members are up for election in a given year. We refer to these as successive and staggered boards, respectively.
Successive boards are convenient for smaller nonprofits who don’t want to overcomplicate their governance structure and for those individuals who may not have as much experience as board members. Having all elections at the same time is more straightforward and intuitive. Though, successive terms can result in a large number of experienced board members leaving at once which can cause the organization to lose momentum.
Staggered boards are initially more complicated to setup but make transfers of power more seamless. Staggered boards are accomplished by dividing board members into classes with each class serving different term lengths. For example, a group of six directors may be paired up and put into three different classes, with the first class serving a one-year term, the second class serving a two-year term, and the third class serving a three-year term. Each year, only two board seats (one class) are up for grabs. Staggered terms promote continuity on the board by ensuring there is always a group of experienced directors on the board while the new directors are getting up to speed. However, sometimes it can be difficult to bring about change in the organization when veteran board members form factions on staggered boards.
The ideal board structure depends largely on the nonprofit. Family foundations or other close-knit organizations may prefer a staggered board so that a member of the family is always in control. Other organizations may want a successive board for the opportunity to completely reset and start fresh, when necessary. Neither structure is inherently better than the other, so it is up to the nonprofit’s board and members to decide what is in the organization’s best interest.
Kyler Mejia is an attorney (bar pending) with Caritas Law Group P.C. Kyler advises nonprofit and socially responsible businesses on corporate, tax, and fundraising regulations nationwide as well as donors with regard to major gifts. To schedule a consultation call (602) 456-0071 or email us through our contact form.