Introduction

One of the key responsibilities for a nonprofit board of directors is to ensure necessary resources. This entails two main types of resources: financial and human. A key challenge for each individual board is this: How the board helps ensure necessary financial resources can vary. Some organizations rely heavily on fees charged for services or membership dues. Others must raise 100 percent of the money needed to carry out their missions.

The board as a whole is charged with identifying what resources are needed and establishing policies for how these resources will be acquired. The board should also determine how each board member is expected to participate in fundraising, which is typically to contribute financially, help develop a fundraising plan, and support the organization's solicitation efforts.

The board's involvement in fundraising varies significantly across organizations. This chapter will discuss best practices that can be applied to organizations of all sizes and maturity levels. In order to make improvements in your board's fundraising efforts, it may require coordination with your governance committee as well as patience.

Why is it important for your board to play an active leadership role in fundraising? There are four key strategic reasons. The board has fiduciary responsibility for your organization. It also has oversight of all fundraising programs and operations. Additionally, the board sets the pace for fundraising through members' own giving, and sets the tone for the broader community's view of your organization.

The Board Member's Role as an Ambassador

In addition to the three duties for which we hold individual board members accountable—care, loyalty, and obedience—there is an additional key role for individual board members. This is being an ambassador for your organization. As ambassadors for your organization, board members represent the organization publicly. This can and should entail helping raise awareness of your organization throughout their networks. Individuals should be proud to serve on your board and should not keep their service a secret.

Do your board members mention their service to your organization on their social media accounts? Do they mention it to their friends, neighbors, coworkers, and others? As responsible ambassadors, they should. Remind board members of the importance being an ambassador plays in bringing awareness to your organization's work.

A Culture of Philanthropy

In order for an organization to succeed in fundraising, its culture needs to support it. This starts from the top. Ideally, the board chair will set the tone and call for all board members to commit to fundraising. If a board chair is not engaged with fundraising, the challenge is identifying another board member who can step in and lead this effort. Can that person become your organization's champion and encourage his or her peers to step up? Perhaps you have a strong development committee chair who can lead the charge or at least a board member who “gets” fundraising.

It can be much harder to change how current board members view their role in fundraising than to start off on the right foot with new board members. Be upfront about what fundraising expectations your organization has for board members early, and do not make exceptions for some board members because of other specialized skills they may offer. Start highlighting the importance of the board's role in fundraising during the recruitment process and continue through orientation. It is better to have a prospective board member opt out of joining the board than to vote in someone who will not support fundraising appropriately.

For renewing board members, a reminder of their commitment to fundraising is still important. Just as your organization hopefully has board members declare in writing conflicts of interest at the beginning of each fiscal year, so too should you have board members commit in writing to how they will be engaged in fundraising. A simple written agreement can be shared with board members for them to personalize. The agreement can allow board members to commit to making a generous personal gift, promoting the organization in the community, supporting fundraising staff in their efforts, and actively participating in fundraising.

For both incoming and current board members, include fundraising commitments in an annual agreement that everyone signs. This is a great opportunity to remind board members what you expect from them in terms of meeting attendance and committee participation as well as fundraising. Be specific about what role you expect them to play in fundraising. Give board members options of how they can help. Not everyone has the willingness or aptitude to help in all areas of fundraising, but there is a role every board member can play in fundraising.

What is meant by actively participating in fundraising? That is up to your organization and potentially each board member. For most organizations, the entire board is not comprised of high-net-worth community leaders who will solicit their networks in person. How you ask board members to participate in fundraising will vary on your organization's needs and individual board members' strengths. Later in this chapter specific ways board members can fundraise beyond asking for money will be discussed.

In a true culture of philanthropy, fundraising is discussed at every board meeting. This is more than just reporting total funds raised since the last board meeting. What methods are being employed? How are fundraising efforts and results tracking to the development plan? Time can also be set aside for actual fundraising—think making thank-you calls to donors or reviewing prospective donors.

While more and more colleges and universities are offering coursework in fundraising, it is unreasonable to expect that board members have formal academic backgrounds in how to fundraise. Education on fundraising is essential to building a culture of philanthropy. This education can take many forms from staff passing along articles of interest to custom-designed, multi-day courses specifically designed for your board. For off-the-shelf education options, many state nonprofit associations and community foundations offer educational programming on fundraising. The Association of Fundraising Professionals (AFP) offers in-person and online learning opportunities also appropriate for volunteer fundraisers such as board members. The bottom line is that board members cannot be expected to fundraise without effectively being taught how.

Board Giving

What is an appropriate level for board members to support fundraising? This is specific to each organization. Nowadays, 100 percent board giving is considered a best practice to strive for. This is replacing the prior “give or get” model where board members were not necessarily asked to give personally. The challenge is, what size gifts should board members be expected to make on an annual basis?

Some organizations have a specific minimum gift amount that all board members must meet. This has its advantages and disadvantages. At least with a set amount, say $5,000, board members know what is expected of them. However, this suggested minimum can backfire with board members who would have given more generously had they been asked. If an organization serves individuals of limited means and it is important for your values to have board members representing those you serve, it can be difficult to identify a minimum gift amount that would be accessible to such board members without reducing the minimum for everyone.

Alternatives to a suggested minimum is asking board members to make your organization one of their top-three philanthropic priorities while serving on your board. This takes into consideration other organizations that may be a priority for board members, such as houses of worship and alma maters, while still communicating the importance of a generous gift. Other organizations ask board members to determine what for them is a sacrificial gift and contribute that amount.

However an organization decides to communicate what should be given, getting 100 percent board giving each and every fiscal year is nonnegotiable. Sometimes board members may push back and ask that the value of the time they donate be counted toward this or the gifts they secure from others. Time and bringing in other donations are important, but so is a board member demonstrating his or her personal commitment to the organization. If board members will be soliciting others on behalf of the organization, they need to be able to say that they personally support the organization. Besides, more and more corporate and foundation funders are asking specific questions about board giving in applications. Organizations that cannot attest to 100 percent are looked upon less favorably and risk losing out on funding.

The Board's Role in Fundraising Oversight

Aside from participating in fundraising, the board as a whole has key roles in fundraising. These tie back to the responsibilities associated with ensuring necessary resources. Just as your board should make sure your organization has a strategic plan and monitors its progress, so too should your organization have a development plan. A development plan lays out how an organization will go about reaching its fundraising goals. A good plan has specific goals and strategies as well as deadlines and responsibilities assigned to specific individuals. Under your board's broader role of providing oversight, it should ensure your organization has appropriate fundraising, gift acceptance, and donor recognition policies in place.

Ensuring that your organization's fundraising methods adhere to ethical standards related to fundraising can be viewed as part of the board's role of providing oversight. Of course, first your board members must be educated about the definition of ethical fundraising. AFP offers a code of ethical standards that covers a broad range of situations applicable to more than just professional fundraisers. Another resource is the Standards for Excellence^® Institute that promotes ethics and accountability for the nonprofit sector.

It is important to understand that just because a fundraising approach is not illegal does not mean it is ethical. For example, the AFP Code of Ethical Conduct prohibits fundraisers from being compensated based on a percentage of funds raised. It is also important to note that donor records are the property of your organization and are not to be used for the benefit of other organizations. The Standards for Excellence^® Code stresses that fundraising costs should be reasonable over time—a 3:1 ratio of dollars raised per dollars spent.

It is also important for board members to be aware of laws pertaining to fundraising. In most states in the United States, the majority of nonprofit organizations are required to register to solicit donations in their home states and any others where they solicit. Which branch of the state government oversees registration varies, although in many cases it is the attorney general's office. Local governments often require licenses for games of chance such as raffles. The Standards for Excellence^® require that nonprofit organizations must be aware of and comply with all applicable laws.

Fundraising ethics also come into play with the duty of loyalty. A board member's duty of loyalty means putting that organization's interests above his or her own. This comes up when we examine conflicts of interest. One often-overlooked conflict of interest that affects a board member's ability to fundraise effectively for an organization is service on multiple nonprofit boards. This is especially true if the nonprofits operate in the same space and compete for the same funds, such as two arts organizations in the same local community.

In the case of a board member serving on similar boards concurrently, he or she will likely learn of funding opportunities that could benefit one organization while in the service of another. In such a case, where does his or her loyalty lie? Similarly, if on the board of multiple organizations, how does a board member decide which members of his or her network to introduce to which organization? When you ask your board members to sign their annual conflict-of-interest disclosure, make sure service on other boards is highlighted as a potential conflict.

The Development Committee's Role

Many organizations have a board committee charged with overseeing fundraising. Whether this is called the development committee, fundraising committee, or philanthropy committee, the emphasis is on overseeing fundraising, not doing all the fundraising. Even if an organization has a committee charged with fundraising, this does not mean that board members not on the committee have relegated all responsibility for fundraising to those on the committee. Because of this tendency, some boards have even disbanded their development committees and have the whole board function in this role. What works best for your organization is your decision. Just remember to consult your bylaws before disbanding an official board committee.

The role of the development committee is to organize and oversee an organization's fundraising. The committee should be a resource to staff and comprised of board and sometimes non-board members who understand fundraising and can help engage others in the process. If your organization's bylaws and policies permit it, the development committee is a great committee to open up to non-board members with fundraising expertise or connections.

The development committee should not be convened merely to read reports of funds raised and listen to staff report on activities. Committee members should be engaged in creating the development plan discussed earlier in this chapter, providing helpful feedback and advice to staff, assisting with fundraising goal setting, and recommending policies related to fundraising. It is critical that members of the development committee are donors themselves and encourage others to follow their example. As with all committees, a clear job description and committee charter should be developed.

Individual Board Members' Roles in Fundraising

In addition to making a meaningful personal contribution annually, board members can and should help with all stages of the fundraising process, from identification, to cultivation, solicitation, and stewardship. (See Figure 52.1.)

Identification

Even for organizations with built-in prospective donors such as educational institutions and hospitals, identifying new donors can be a challenge. This is not a challenge for staff to face alone. Board members can be called upon to identify prospective donors from within their social, business, and other networks. The key to success is identifying the prospects most likely to support your organization.

This is where the LAI principles come in—linkage, ability, and interest (Figure 52.2). You are looking for prospective donors with a connection to your organization. This connection can be a relationship with one or more board members or a history with the organization. Ability and interest are also important. You want board members to identify prospective donors with the capacity to make significant gifts. This ability should be based on true ability, not someone's best guess. Finally, prospective donors must be interested in your organization and willing to learn more. That is where board members can share information about your organization and gauge interest.

Once prospective donors are identified, board members can help with prospect review.

They can provide insight into what the prospective donors' interests might be in your organization and help determine connections. They can also provide insight into what size gift the prospective donors could make. When engaging board members in prospect review, it is important to emphasize confidentiality. What is discussed and shared should stay in the room and only be noted in files that stay with staff in a secure location.

Staff's Role in Fundraising

When board members are actively involved in fundraising it is important to differentiate what roles are appropriate for them versus staff. Overall fundraising efforts are coordinated by staff. Staff should keep files, records, mailing lists, and acknowledgments. They are also likely ghostwriters for many board members and prepare correspondence on their behalf.

The secret to successfully engaging your board in fundraising is to make it accessible. Offer training to empower board members and equip them with fundraising skills. Provide the logistical and behind-the-scenes support they need. Most importantly, be patient. Creating a culture where your whole board embraces fundraising takes time, but the outcome will be well worth the effort.

About the Author

Stephanie Cory is committed to strengthening the nonprofit sector through education. She has served as an executive director for a health advocacy organization as well as held development and program management roles for organizations serving seniors and people with disabilities. She has also consulted for a variety of educational and arts organizations, helping them strengthen governance and fundraising. Stephanie has worked with organizations of all sizes—from grassroots with no paid staff to multi-campus health-care providers with upward of $50 million in annual revenue. She is an adjunct faculty member for Villanova University's College of Professional Studies where she teaches a variety of fundraising topics. Stephanie also understands nonprofit management through the lens of a volunteer. She has more than 25 years' experience as a board member for organizations ranging from grassroots with no staff to a multi-million-dollar international association.

Stephanie is a Certified Fundraising Executive (CFRE) and earned her designation as a Chartered Advisor in Philanthropy (CAP^®) from the American College of Financial Services. Demonstrating her commitment to helping organizations strengthen their governance and employ best practices, Stephanie is a Certified Governance Trainer through BoardSource and a licensed consultant through the Standards for Excellence^® Institute. She earned bachelor's and master's degrees from the University of Southern California.

Stephanie is a popular speaker and author on a variety of fundraising and governance topics. She is a frequent voice on the web through the variety of webinars she has facilitated for BoardSource, AFP, and the Pennsylvania Association of Nonprofit Organizations, among others. She has been a featured author in Advancing Philanthropy, Fundraising Success, and Giving Tomorrow magazines as well as published online through BoardSource and Charity Channel.