In the ever-evolving landscape of independent schools, strong governance is more than a best practice - it’s a strategic imperative. Boards of trustees play a vital role in ensuring long-term financial sustainability, and their effectiveness hinges on understanding the unique financial dynamics of nonprofit educational institutions.

At NBOA Advisory Services, we believe that good governance begins with informed trustees, collaborative leadership, and a shared commitment to mission.

That’s why we’re spotlighting key insights from NBOA’s publication, Effective Financial Governance for Independent School Trustees, to help school leaders and board members strengthen their financial stewardship.
 

Five Governance Essentials for Independent Schools

Financial Literacy for Trustees

Trustees don’t need to be accountants, but they do need to understand the fundamentals of nonprofit finance. This includes key metrics like expendable net assets, liquidity, and ideally, the Composite Financial Index (CFI), which help boards assess financial health and make strategic decisions.

Strategic Alignment Between Budget and Mission

Budgets should reflect the school’s strategic priorities - not just historical spending patterns. Boards should ask: How does our resource allocation support our mission and long-term goals? A well-aligned budget is a powerful governance tool.

Effective Finance Committee Practices

Finance committees should move beyond routine budget approvals to engage in deeper strategic discussions. Designating time for focused topics - such as tuition modeling, compensation strategy or capital planning - can elevate the committee’s impact.

Oversight of Risk and Compliance

Governance includes ensuring that internal controls, cybersecurity protocols and regulatory compliance are in place. Trustees should understand the school’s risk profile and how it’s being managed across operations.

Stewardship of Endowment and Restricted Funds

Boards must ensure that donor-restricted funds are used appropriately and that endowment spending aligns with UPMIFA guidelines. Transparency and documentation are key to maintaining donor trust and legal compliance.

New Support for Governance Excellence

To help schools strengthen governance practices, NBOA Advisory Services is proud to welcome Ann Klotz, a seasoned Head of School and governance expert, to our team of Advisors. Ann offers customized workshops and coaching for boards and leadership teams, focusing on trustees general and fiduciary roles, strategic alignment and board/head/CFO partnerships, in collaboration with our school finance experts.

Explore our new Governance Consulting Services

Governance isn’t just about oversight - it’s about partnership, strategy and stewardship. As schools face increasing complexity, the role of trustees becomes even more critical. With the right tools, training and support, boards can lead with confidence and clarity, and NBOA Advisory Services is here to help.