Monday, March 12, 2012

The sticky question of board giving

What do you mean we have to give money????

It doesn't matter whether I'm training an individual board, facilitating a workshop at a conference, or leading the governance unit in one of my online classes. When I'm talking about the roles of nonprofit boards, no concept is more troubling than the notion of including a financial contribution requirement in the member job description. The inevitable responses range from confusion to queasiness to outrage. How can we possibly ask board members to pull out the checkbook or credit card once a year, appalled audience members ask? Isn't their gift of time enough?

For many foundations and individual major donors, the answer to that is "No." Moreover, how they respond to your request for funds often depends upon how you respond to a question they pose to you: What percentage of your board made a financial contribution to your organization in the last year? The rationale is simple: If your own leaders aren't committed enough to make a financial investment in your mission, why should we?

Obviously, your board is free to enact any policy that it wants to adopt. That includes the right to have no policy mandating financial contributions. But with that freedom should come the knowledge that such a choice may have consequences. Real, financial consequences.

If your nonprofit doesn't apply for grant funding (especially from private foundations) or engage in major gift fundraising, this may be a non-issue. However, if those are part of your fundraising mix, I can pretty much guarantee that you will eventually encounter this phenomenon. If your response to the percentage question isn't "100 percent," don't be surprised when your request is moved down the priority list or denied completely.

My counsel to boards is to adopt (and enforce) a board giving policy that calls for annual contributions by each member at a level that is personally meaningful. "Meaningful" to you may be $1,000. "Meaningful" to me may be $10. "Meaningful" to our fellow board member may be $100.  I've never heard of a gift request or grant proposal being disqualified because of the amounts individual members gave. What donors and foundations want to know is that every member gave. It's a matter of commitment.

A "personally meaningful" giving policy accommodates concerns I hear vocalized by smaller nonprofits, especially by human services boards that recruit current or former clients or that place a premium on broad community representation (including low-income members). "Personally meaningful" is a pretty broad definition. (Even a penny qualifies, strictly speaking.) There is no reason to embarrass anyone. Only the CEO, the bookkeeper and I need to know how much I gave this year. My board peers only require confirmation that I have fulfilled my annual contribution commitment.

What is behind this reluctance to expect this of our board members? I've come to the conclusion that it's connected to the "any live body will do" trap that too often drives board recruitment and retention efforts. We feel so lucky that we were able to sweet-talk them into serving (probably with promises that "It won't take that much time...") that we don't want to overdo it. Asking them to give money may just push them over the edge, we fear. 

If that one step is too much, we have a problem - probably with our entire conception of the board's purpose.  We set boards up for failure, and ourselves up for frustration, when we minimize the significant commitments that come with governance. For many boards, part of that commitment is a financial one. We need to own and enforce that.

NOTE: This post emerged from a conversation with friend and fellow nonprofit junkie Pamela Grow. Pam addressed the topic in this important post: At Last! 100% Board Giving!  The statistic she cites, that 55 percent of respondents to her 2012 Small Shop Fundraising Survey lack full participation by their board members, sparked this collective reflection.


Elizabeth Jennings said...

Important conversation, DB! We were just talking about this at our local nonprofit roundtable, and it was a topic at a recent AFP workshop here. One participant noted how board members balk at making a financial contribution AND participating in fundraising events. I think it comes down to boards understanding the difference between governance and support roles, as described by Jan Masaoka and BoardSource. Approving the fundraising plan and having oversight of resources is a GOVERNANCE role, while participating in fundraising events and making a personal contribution are SUPPORT roles. It also is a question of culture: Is there a culture of philanthropy throughout the organization (board, staff, volunteers), or are "donors" treated as separate from the organization? At the AFP workshop, Ray Li from Seattle's Neighborhood House shared their excellent "board commitment" form, which includes an annual personal pledge, PLUS commitment to their two fundraising events; their board includes low-income and immigrant people, and they still have 100% participation "at a level that is significant" to them.

Board Governance and Support Roles:

Kevin Monroe said...

Debra -- I'm with you on this approach to giving. I think it's important that organizations value ALL giving from ALL board members regardless of their wealth. As you stated, it's a matter of being personally generous and committed to the organization, not how much a person gives.

I want to see nonprofit boards STOP begging for board members and view board service through a different lens. A lens that sees board service as a privilege and a responsibility, not an act of charity.

Debra Beck, EdD said...

I'm so grateful for both of your comments to this post, Liz and Kevin. Each adds a layer to what I think is a deeper cultural issue than this question may appear to be on the surface.

Liz, I'm particularly glad that you offered the illustration of a board that successfully implemented a giving policy, even with representatives from low-income and immigrant stakeholder groups. It affirms that such a policy needn't be a barrier to participation, a common justification for rejecting such a policy. In some respects, it levels the field across the board: we're equal participants in all aspects of board leadership, vs. some of us being more equal because we're able to write a check while others aren't.

You raised the notion of a culture of philanthropy, which immediately reminded me of a fascinating discussion that occurred in my online class a couple of weeks ago. Students responded to a Movie Monday video, on building a culture of philanthropy. That kind of environment feels very different from one where we're focused primarily on fundraising tasks.

Kevin, you and I are kindred spirits when it comes to framing nonprofit governance as the significant leadership responsibility that it is and recruiting accordingly. The more I think about this, the more I'm convinced that this truly is about something different than "we might want to recruit a low-income member some day." In the settings where I've introduced this (usually as a function of BoardSource's "ensuring adequate financial resources" role), a significant concern is recruiting new members. They're hurting, they're low on ideas for where to go to find prospects, and they're fearful of asking "too much" and being rejected.

The problem with that approach, as we all know, is that "live bodies" alone don't guarantee the leadership and commitment that we require of our boards. I'm of the firm belief, as I know you and Liz are, that boards rise to the expectations we have of them.

Debra Beck, EdD said...

I mentioned a Movie Monday video that resonated for my students and may contribute to this conversation. here's the link:

Emily Smith said...

A person very involved in local non-profits recently introduced me to the principle "Get, give, or get out" in regards to board membership. You get funding, you give your own money, or you reconsider what your exact commitment to the organization is if you can't contribute to the funding that allows it to function. While this may seem rather mercenary, the truth is that the bills need to be paid and a financial commitment is acknowledgement and support of a basic reality of the ability of an organization to function. It seems somewhat tacky to codify this in the bylaws, but it is something that board members need to understand and hopefully participate in out of genuine support of the organization and understanding of its financial needs. Actually … this is precisely why a requirement is perhaps not productive — the requirement doesn't create the understanding about why financial participation by board members is important. Instead it feels like a fee for participation, and it's not a gift if it's required.

Nancy Iannone said...

I have had this conversation with board members as an ED and as a peer serving on a board. The question that often gets board members talking instead of reacting is, "Is ABC organization one of your top charitable donations each year?" A close second is, "Why should others give to this organization if the board of directors does not?" This kind of discussion has led to the addition of annual giving at personally significant (or meaningful) level to the board member agreement.

I may just have to add this topic to our local round table for Community Benefit orgs. Thanks for starting this conversation Debra!

Debra Beck, EdD said...

I really appreciate your feedback, Emily and Nancy. Great conversation, indeed!

What I'm finding so fascinating in the discussion here is that there feels like what may at one level seem so straightforward and/or based on pragmatic factors (e.g., board members who may lack the capacity or missing out on funding because we couldn't report 100 percent participation) really seems to be far more nuanced and layered than I expected going into this post.

I also can't help thinking that it offers another example of the perils of oversimplifying the work and leadership roles of boards.

You're expanding my horizons exponentially today!