Should The Not For Profit Board Raise Money?
19 December 2003 at 12:12 pm
When US writer Jan Masaoka of CompassPoint Nonprofit Services met with leaders of Silicon Valley companies, many expressed their disenchantment with the Non for Profit boards they are on. The greatest aggravation came from repeated experiences of being asked onto boards to contribute their expertise, only to discover that the only things desired from them were large personal donations and fundraising!
Masaoka says this is an all too common scenario where the CEO is frustrated because the he thinks the duty of the board is to raise money – but that’s not happening.
She says some board members do believe that every member “must give, get or get out”, others resent being required to give when it was not spelt out with the invitation to join and others many doubt that they can raise funds.
According to the CompassPoint expert there is a way to untangle the knot if you think of a board as having two roles:a Governance role where the board acts as a body to ensure accountability, and a support role where board members support the organisation, acting as individuals, through volunteering and donating.
Ensuring that the organisation has a realistic strategy for raising funds is a critical governance responsibility of the board of directors. But that strategy may or may not include individual fundraising by board members.
The strategy for raising funds will probably include a combination of efforts: fees-for-service (such as tuitions, service fees, registration fees, tickets), special events, mail fundraising campaigns, government contracts, and individual major donor gifts.
According to Masaoka there are four crucial rules to fundraising on the board:
1. As a body, the board is responsible for approving and monitoring performance of a revenue strategy that will sustain the organisation’s work.
2. In the context of that plan, as individuals, each board member must do something to help implement that strategy.
3. No one has to do everything, and
4. Expectations must be clearly and fairly communicated to new board members during the recruitment process.
In other words, there should be methods that take advantage of each of the individual strengths that board members have and are willing to contribute.
The board’s Governance responsibility is to ensure that a suitable financial or revenue strategy is in place. This strategy must have three characteristics:
a) it will result in funding needed by the organisation for its work;
b) it will provide funding for emergency reserve, evening out cash flow and organisational investments (such as in new computers or carpeting, or a publicity campaign); and
c) it is in line with the organisation’s ethics and values (for example, whether or not a community centre should accept donations from beer companies).
In short Masaoka says the board’s Governance responsibility is fulfilled by its choosing and monitoring a revenue plan, while individuals support the organisation by participating in the plan’s implementation.
In Australian a number of Foundations and Charitable boards are asked for a set donation each year from individual members which goes towards administration costs.
Masaoka says clarifying this distinction, as well as the expectations of board members, will go a long way towards calmer, less charged, more productive discussions about fundraising.
(This story is reviewed with the permission of CompassPoint Nonprofit Services and Board Café.org.)