Nonprofits face a myriad of problems, such as limited resources, fundraising requirements and legal limitations. The teams that oversee these organizations are charged with managing these demands, which is the reason why models for nonprofit governance are crucial.

Nonprofit governance models structure the board's activities and committees according to functional boundaries. If there are staff responsible for finance and human resources as well as fundraising and planning then the board can organize committees focusing on these subjects. John Carver's Policy Board Model popularized this management team model in the 1970s. It is most prevalent for medium and small-sized nonprofits.

While this structure is efficient, it can result in a board that is overburdened with responsibilities and struggling to make decisions. A growing number of nonprofits adopt different governance models that delegate responsibility to the individual, while requiring the board members to meet regularly to ensure proper function.

Another important function of a board is to set strategic goals for the non-profit. This is done by identifying urgent needs and issues, and developing solutions that the organization could pursue. This is usually done through the use of a SWOT and a scheme for evaluating the outcomes that incorporates concrete measures to measure the success.

The board must not only establish the strategic direction but also decide on and evaluate the executive director. This is one of the most difficult tasks due to the fact that it requires a blend of management expertise, knowledge in program areas, and leadership style. A well-run board comes up with an unambiguous job description and hires an Executive Director that is a great match.