Key factors in this critical relationship are the Constitution, Statement of Purpose/Objects, internal policies and procedures, and the Integrated Planning Framework.
The Constitution as a legal document establishes the expectation of association, company or cooperative members upon the Board or Committee as the governing body of the legal entity: together with the broader requirements of relevant law, the Constitution establishes the required behaviour and accountability of the governing body, and
The Statement of Purpose or Objects, as a Rule in the constitution, provides the focus for the organisation in all strategic, operational and financial planning, and
Board or Committee-endorsed policies and procedures set down the manner in which the Rules within the Constitution are to be implemented, followed and resourced, and
The Board or Committee-endorsed Integrated Planning Framework (ranging from the strategic – through business and operational – to individual work plans) establishes the required procedure for monitoring and managing process and progress against the endorsed plans at all levels of activity within the organisation.
Major sections of a constitution
- the legal name of the entity
- definition of terms used in the constitution
- statement of purpose or objects – this is the purpose for which incorporation or registration is requested and granted, and for which the organisation exists
- rules by which the entity will operate, including the process for amending or changing the statement of purpose or rules, and the legal process of winding-up or terminating the entity.
Direction is given in the rules within the Constitution regarding the procedure for nomination, election or appointment of Board or Committee members – who are legally accountable to the Association’s membership base to ensure that:
- all resources available to the organisation are invested in or applied to the purpose of the organisation, and
- the affairs and activities of the organisation are carried out in accordance with the rules.
Most importantly, the Constitution gives direction on the distribution of surplus funds, requiring that they are to be invested in the affairs and activities of the organisation.
Major components of an Integrated Planning Framework
Planning is simply looking to the future and discovering alternative courses of action.
Strategic planning is the process of reducing ‘possible’ alternatives to selected and specific courses of action over a 3-5 year period which are most likely to achieve and enrich the purpose for which the organisation exists… ie providing particular benefits for Association members and service-users.
The Strategic Plan is just the starting point in introducing sound business practices – and always remember that a nonprofit organisation providing services is in the business of providing services!
The process is explained in sequential order:
- The 3-5 year Strategic Plan informs the –
- Year 1 Business, Operational and Individual Work plans (ie all activity that must occur during the first year of the strategic planning period in order to achieve the strategic goals or key result areas) -
- which inform the Budget Estimates and Cashflow Projections for each financial year of the strategic planning period, which are monitored through –
- Financial methods, controls, checks and balances – and
- Key Performance Indicators, Measures and time specific targets at all levels of activity within the organisation – and
- Risk Avoidance/Management Procedures – and
- Continuous quality improvement procedures and practices – through an appropriate
- Organisational structure, policy framework, with adequate and up-to-date corporate functions.