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Why Nonprofit Boards and Fundraising Must Mix

By Nell Edgington



mixing board and fundraisingI recently received a note from a blog reader who disagreed with my argument that a nonprofit’s board of directors should be charged with raising 10% of their nonprofit’s budget. Not only did this reader disagree with the idea of setting a 10% board fundraising goal, but he disagreed with linking board governance and fundraising at all.

As he wrote:

“I recently resigned from a board of a nonprofit, after a 5-year stint. I was honored to be asked to join the board, until at my first meeting pledge cards were passed around, and I realized it was my money, not my leadership skills, that qualified me for board membership. I have given on numerous occasions, but I refused to pay a “bill” I received for my share of employee Christmas bonuses last year. There have been many instances where the board was expected to give money. Only a tiny fraction of the budget would be raised through these measures, so it seemed like it was a membership test. Governance should be totally separate from fundraising.”

While I appreciate this reader’s frustration as a board member, I would argue that his unfortunate experience had more to do with poor management of a board, and less to do with fundraising being part of a board member’s charge.

I don’t believe board members should ever be “billed” for a contribution. Rather, the board chair and the executive director should sit down with each board member individually on an annual basis and have an open conversation about that board member’s role on the board. This should be a much larger conversation than just what she wants her annual financial commitment to be, but that still must be part of the conversation. So while you absolutely should discuss why the board member has chosen to serve on your board and what she would like her role to be, you also can (and should) discuss how she wants to contribute to the financial model of the organization.

And if you define a board member’s “contribution” much more broadly than just a check she writes, the sum total of all of the contributions each board member makes can be much more significant than “a tiny fraction of the budget.” Every single board member, if truly right for the post, has many ways to contribute to the financial model of a nonprofit (here is just a beginning list of ways). If you ask board members to think strategically about how they can contribute, and if they are well versed in the financial model of the organization they serve, it should be fairly easy to get them involved in a significant way.

And getting each board member engaged and involved in the organization should be the aim. While I agree that the idea of a “membership test” is certainly unappealing, there should be a bar to being a member of the board of a nonprofit organization. If some members are allowed to be members in name only, but not required to have any skin in the game, then what compels any member to invest their time and resources in a significant way? If there is no bar that a board member must clear to be a board member, then what separates a board member from just an interested member of the public?

A board of directors must be a nonprofit’s staunchest supporters, most vocal advocates, and most committed allies. If a nonprofit cannot depend on its board to work tirelessly, not only to ensure achievement of the mission, but also to ensure financial sustainability, how can a nonprofit possibly expect those outside the organization to care? So, yes, being a member of a board must come with some level of commitment, both of time and of resources.

Because at the end of the day, there is no mission without money. By allowing any individual board member, let alone your entire board, to make programmatic and organizational decisions without fully understanding and contributing to the financial model of the organization you are creating an enormous disconnect between mission and money. A person cannot hope to understand something unless they have actually worked within it. So each board member must somehow contribute to the financial model of the nonprofit on which they serve.

Just because nonprofit leaders sometimes do a poor job of engaging their board in the financial model does not mean that we should separate the governance of a nonprofit from its financial model. All board members must understand, embrace, and actively work toward the financial sustainability of the nonprofit they govern.

Photo Credit: Susana Fernandez

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.


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10 Comments to Why Nonprofit Boards and Fundraising Must Mix

Shirley Warren
July 13, 2016

Nell, great article and one that should be shared with non profit boards. I do sympathize with the board member, mentioned in the article, but also agree with you that this unfortunate experience was one of poor management of the board.

The issue of how board members contribute to an organization financial model is one that I am sure many non profit boards struggle with. Ideally this topic should be part of the discussion during the vetting process(before a potential board member joins a board), should be documented as part of the overall roles and responsibilities of each board member and yearly review with Governance Committee Chair, Board Chair and Executive Executives.

I will share this article with others. Thank you…

Nell Edgington
July 13, 2016

Thanks Shirley!

Timmy Ray
July 13, 2016

Glad to have received and read this article. We have this conversation with Board candidates prior to them joining the Board, during new member orientation and throughout membership and for some reason many think the conversation is directed to someone else. Despite webinars and shared articles we are unfortunately cleaning our board out. I believe it has come to the point of the Board precluding the organization from accomplishing its mission. That is how despondent the members have become around fundraising. What’s even more discouraging about it is that although the best practice is that the Board should be raising 1/3 of the organizational budget, Our Board’s annual goal is distressingly lower and a very small fraction of what it should be. I am actually ashamed to publicly say the number. It may be even lower than some organization’s quarterly phone bill. Yes…that low.

What I am learning is that a lot of people want to be involved and think well one amount is what is proposed and there’s an amount that’s acceptable and they couldn’t be more incorrect. What’s puzzling is that where membership recruitment is concerned, many of those low level participants tend to have interested candidates they have recruited. And, they will vote to approve programming they know will require funding which includes member support and avoid participation. No lie! So…we are cleaning it out.

We have all of the tools including a Board Memorandum of Understanding that spells it out and is signed during new member orientation. We go through the whole nine yards. If there’s something we will probably institute will be a six month check up regarding this because if members don’t lead the way with fundraising foundations and corporations will not give. You can believe that.

Anon
July 13, 2016

Thanks so much for publishing this post. Failing to understand board members’ proper roles, one of which indeed is fundraising, creates a lot of acrimony, unfortunately.

While “give, get or get off” (as in give money, get money or get off the board) may be a somewhat outdated slogan for board service these days, one of a director’s 10 main duties remains to:

“Ensure adequate financial resources. One of the board’s foremost responsibilities is to secure adequate resources for the organization to fulfill its mission.”

This board member’s comment to Nell reflects a complete lack of understanding of what a good board does. The board chair and the nominating committee failed in that case. When friends recruit friends and people like them to serve on boards, the ignorance is just self-perpetuating. Too many nonprofit boards are happy just to have seats filled, settling for mediocre performance and being more of a liability than an asset to the organization.

Nell Edgington
July 14, 2016

Thanks Timmy. It sounds like you’ve had a rough time getting your board engaged in fundraising. It may well be that you have the wrong people. Once you do have the right people, I strongly recommend doing an annual one-on-one meeting with each board member to discuss why they serve, how they want to be involved and what their financial contribution will be. Good luck!

Nell Edgington
July 14, 2016

Yes, absolutely! Agreed!

Keenan Wellar
July 14, 2016

I have to agree with the writer of the note (as an aside, it was bad management that a board member did not know what was expected of them long before arriving at the table).

Governance is not fundraising. I do not understand this confusion. A board member could give $100,000 and be a terrible board member. A board member can give $0 and be a diligent governance worker who is an educated champion of the mission.

If you want to have a fundraising committee where everyone is expected to contribute and they know this going in, great.

As a founder of a non-profit that has worked with many board members for 20 years to build our organization, I don’t give a fig if they make a donation, I care about how well they do their actual jobs (given we don’t have an issue with revenues or deficits in particular, their job is to oversee effective use of funds and proper planning for growth, etc and putting up $100 to say “I’m a donor too” seems patronizing and insulting to all concerned).

Nell Edgington
July 15, 2016

Thanks Keenan for your comments. Congratulations that your nonprofit doesn’t have an issue with revenues or deficits, you are indeed one of the lucky ones. I think, however, for the vast majority of nonprofits they simply cannot go it alone. They have to have the support and engagement of their leadership (the board of directors) in order to make their organization financially sustainable. Because at the end of the day, you cannot be a “champion of the mission” if you do not understand and do not engage with the financial model necessary to make the mission a reality. There simply is no mission without money.

LW
August 2, 2016

Great article. As a board member, passion for an organization’s mission must translate into personal giving at whatever level is appropriate and/or opening doors to gifts. That’s in addition to other valuable traits such as leadership, community influence, mission delivery expertise or audience/customer representation. What I’ve seen over the years is that sometimes board leaders are unwilling to set these expectations and carry through with accountability out of fear of losing that board member or simply being a bit too shy to have those conversations.

Nell Edgington
August 4, 2016

Yes, I completely agree. But we have to have those hard conversations in order to move forward. Thanks!

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