Board Members Financial Contribution to the Non-Profit Organization

This week I was working on a draft of by-laws for a non-profit organization and in the discussion with the director of the agency he asked if board members “had to make an annual contribution” to the organization. The question came in the context of an exchange about the roles and responsibilities of board members as delineated in the by-laws. It is one thing to solicit board members and have an expectation that they will make an annual contribution to the organization and it is quite another thing to formally mandate an annual contribute as stated in the by-laws. What are the implications of these policies for building and strengthening the board and its relationship with the broader community?

As I discussed in a previous posting (“Fundraising and the Board”, May 6, 2009) the board is an example for the rest of the community and those people who identify with the mission of the organization by assisting in the raising of funds to support the programs. A stronger statement is made when board members contribute not only their time but also their financial support to the agency. As the old adage goes, “Actions speak louder than words.” Thus, when a board can declare that all of its members are supporting the work of the organization on annual basis it is a clear statement to the community. It delivers a very clear message to potential and present supporters that the board really believes in what the agency is doing to improve the quality of life of the people receiving its services.

The statement resonates with everyone who hears about the board’s commitment and it smoothes the way for those raising funds in the community to approach potential donors and to maintain the giving level of present donors. The question is whether this is something that should be legislated in by-laws or whether it can become part of the culture of the organization.

There are implications for each of these approaches.

The appropriate opportunity to be clear about the financial obligations members have to the annual campaign of the organization is when someone is approached to serve on the board. When the president of the board or a board member engages the person in a discussion of the agency’s expectations of its board members it is the perfect time to discuss the annual contribution. Of course there are many different approaches to requiring an annual contribution. Some organizations will be very clear and state either formally or informally that there is an expectation for an absolutely minimal amount that must be contributed to maintain a position on the board. While this has been acceptable and true in the recent past, in the present economic climate more organizations have either lowered the minimal amount or changed the policy. In a time like the present, it is more important to strengthen the network of friends and committed leadership and than it is to enforce a policy that worked in a different economic situation.

Thus, once a person accepts a position on the board they know they have committed themselves to participate in the annual fundraising effort. It is then up to one of the veteran members of the board who is involved in the campaign to follow up with the new member and solicit them for their donation. The solicitation is an opportunity to cultivate the new person’s interest and involvement in the organization and for the person to develop an understanding of the depth of commitment to the agency that is shared among the board.

Of course, this requires a leadership base that is strong, confident, knowledgeable and committed to move the organization forward. Lay leaders that have become volunteer solicitors need to have a strong sense of self confidence in not only the agency but also in their ability to relate to their colleagues in this realm. When an organization has serious questions as to whether there are such people on the board who can be involved in an orientation process that communicates the expectations for financial support clearly as well as board’s role in accepting responsibility to contribute annually, then a statement in the by-laws reinforces the policy and it does not rely on individual members communication with each other alone.

In making the decision whether to adopt a formal or informal policy concerning the financial commitment of members of the board there is no “right” or “wrong” answer. It really depends on what works for the members of the board; the culture of the organization; what is acceptable in the community; and whether it will strengthen the organization’s ability to attract strong committed leadership. There needs to be a careful planning process to explore the issue from various sides and then to confirm the board’s commitment to stand behind the decision and to successfully implement what is decided. The bottom line is that boards that have full participation in the annual solicitations often have an easier time in their fundraising efforts reaching out to those who do not have formal roles in the on-going functions of the agency in the community.

Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Leadership and Philanthropy Program and has a consulting firm focused on strengthening non-profit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.