Most nonprofits judge the effectiveness of a resource development professional by how much money they raise. Instead of a retainer, it is common for organizations to pay the professional a percentage of the funds raised as their fee. Despite this, professional fundraisers who subscribe to a code of ethics will not work for an organization that pays based on the funds raised or a bonus system when the contributed funds exceed the stated goal.
When the agency’s CEO engages the fundraiser, the first step often is developing a financial resource development plan for the year. This plan often includes one or more of the following components: a membership campaign, an annual campaign, special fundraising events like a gala or a walk-a-thon, and occasionally a capital campaign for a building project. Depending on the sophistication and commitment of the volunteer leadership, the resource development professional will also work in coordination with an earmarked committee of the board.
Recently, a colleague told me about her experiences working closely with the chair of the financial resource development (FRD) committee. The entire fundraising effort was also coordinated with the volunteer leader and the members of the committee. As such, the chairperson and the professional develop the annual fundraising campaign together. This included reaching out to individual donors, alumni, foundations and several large corporations. In the second year of the professional’s tenure, she had raised 80% of the annual goal within the first 6 months.
The board members involved in the fundraising efforts were greatly pleased with the fundraiser’s efforts. Despite this, the president of the board and the remaining members were not informed about the valiant efforts that were made to achieve this accomplishment.
The president of the board was concerned about the percentage of the budget that was going for overhead and one of the first figures that drew her attention was the FRD professional’s compensation. Although the income generated from the fundraising efforts was far above the cost of her salary, a decision was made to cut the position to part-time as part of a series of measures undertaken to cut administrative expenses. This caught the FRD committee by surprise; however, since the board president was one of the most active people in the organization no one was willing to contradict him and advocate for the continued full employment of the FRD professional
In reviewing the dynamics with the professionals involved it became apparent that they had done their due diligence with the staff of the nonprofit and with the FRD committee. The problem was they had not communicated with the president of the board and remaining board members. They knew that there was a steady stream of income and that much of the agency’s annual budget had been secured early in the year.
The president of the board was not invested in the fundraising efforts and had not worked closely with the FRD professional. The CEO had not educated the board president to understand what had been accomplished in the last year and a half. The result was that the president and a majority of the board members were totally disconnected from the FRD process.
The CEO and the balance of the board members were not willing to advocate for the FRD professional, as is not so unusual in nonprofit organizations. Although a number of professionals in the agency and the chair of the FRD committee expressed their regrets to the FRD professional, no one advocated for maintaining the full-time position. There is an important lesson to be learned from this example.
The FRD position and the accomplishment of the professional in any nonprofit organization must be known by all the members of the board of directors. It is important for the FRD committee of a board to receive a vote of confidence in the annual FRD plan and to be kept abreast of any and all accomplishments. The entire board needs to not only be cognizant of the annual plan, but must be committed and involved in making it a success.
The president of the board would then not be making a unilateral decision if the entire board is aware and supportive of the FRD plan. It is not only a matter of the results of the FRD plan, but also the way it has been implemented. The FRD activities of a nonprofit should involve the entire board of directors, as well as the staff of the organization, and there should be a broad sense of ownership of the process and the results.
The more the board is involved in the planning and implementing of the FRD process and all of its various activities the more they will feel a sense of the challenges, responsibilities and accomplishments. They will be aware of the valuable role of the FRD professional and the unique contribution the person can make to the success of the campaign.
Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Nonprofit Management and Leadership Program and has a consulting firm focused on strengthening nonprofit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.