Personal Giving by Nonprofit Board Members: Why 100% Matters
One of the most basic measures of organizational health is the commitment of every board member to contribute within his or her means. If board members don’t provide regular support, it suggests that they do not understand what it means to lead on the organization’s behalf. It could also suggest that they don’t understand why the organization needs financial support. Nonprofit staff members and board chairs have an obligation to make sure that the reverse is true. A high functioning board should strive for a personal 100% participation rate.
Among the governance responsibilities of boards is to guarantee that the organization is on sound financial footing. When board members contribute, they demonstrate their understanding that raising funds is essential to the financial stability of the organization. The Princeton Area Community Foundation is one of an increasing number of foundations that ask grant applicants to provide statistics about board giving. In the words of its president, Nancy Kieling, “If the people closest to an organization don’t support it, why should anyone else?”
There are three major reasons why board members fail to give. First, a board member may not understand why the organization needs support. This is a serious concern: if someone who regularly commits time and believes in the mission doesn’t perceive financial need, who will? Board members must understand how the organization’s mission and aspirations depend on contributions. It is the job of staff members to articulate the organization’s needs in compelling ways and to explain their nonprofit’s financial challenges and opportunities clearly.
A second reason that board members may not contribute is that they view their commitment of time as a substitute for financial support. Volunteer time is critical to any organization, and in many cases it may be the most important form of support that an individual board member provides. Dollars and service are not interchangeable, however; there are certain things for which nonprofits need money. Every board member should make at least a symbolic contribution to show their commitment to the financial well being of the cause.
Unfortunately, all too often board members don’t give because they have not been asked. When board members are recruited, there should be a candid conversation about expectations. The board leadership must set a good example by giving first; they should also serve as solicitors to encourage their peers to participate as well. Should a board require contributions from its members? According to BoardSource, 55% of nonprofit organizations do require annual contributions as a matter of policy. Whether a policy on personal giving is desirable will depend on the organizational culture. If a policy is established, it will be most effective when it results from a thoughtful conversation between the board chair and each board member about an appropriate gift, rather than from a mandated gift level. The philanthropic capacity of board members may vary widely, and the desired outcome is for every board member to feel engaged and proud of his/her commitment. A policy on board giving is particularly worthwhile if it helps the organization to introduce clear expectations and elicit feedback. The same results can be accomplished through a less formal process if the board chair and staff leaders are willing to speak openly about the benefits of 100% participation. Although The Princeton Area Community Foundation does not use board support as a criterion for grant-making, it does require participation statistics as part of the application process. Nancy Kieling reports that grantees welcome the inquiry. “By asking about personal giving by board members, we give the leadership of nonprofits a way to fortify the discussion within their own organization. When we raise the question, staff members can be more public in raising the question internally.”
There are some nonprofit boards that include government appointees or representatives assigned by major corporate donors. Nonprofits may also choose to recruit members from the population whom they serve. These board members correctly understand their primary role as providing insight and experience rather than funds. Organizations should not shy away from having thoughtful conversations with all board members, however. Within their means, everyone can play a part, and everyone leads more effectively when they can speak with confidence about their personal investment. The board as a whole is empowered when it takes symbolic ownership of the organization’s financial future, and it should celebrate 100% participation proudly.
Many nonprofits, particularly those that raise money through special events, use a “give or get” philosophy, by which board members are expected to give at a certain level or bring other donors to the table sometimes literally by selling benefit tickets. Again, this kind of service is very helpful, but it isn’t a full substitute for personal support. Any board member who is asking others to give will be more effective if he or she is able to talk about his or her own commitment.
For nonprofits that do not have an established history of personal giving by board members, there are several steps that should be taken. A clear commitment of the board leaders to serve as role models and solicitors is essential. Candid conversation should take place about expectations at the time that new board members are recruited. Whether through a formal policy or not, board members should be engaged in an ongoing discussion about the financial needs of the organization and their responsibility to lead by example. Ultimately, a willingness to ask board members for support is the first step toward asking the broader donor community for support. One hundred percent board participation sets a standard that any potential donor will respect.