Governance and Fundraising: The Board’s Responsibilities in Building for Sustainability

Last week I received a comment from one of the website’s readers and she queried me about my focus on the governance function of the board of directors. She wanted to know how I saw the board’s responsibility for the financial resource development of the non-profit organization. She asked what the division of responsibilities was between the professional staff and the members of the board?

Let me begin with the bottom line and then I will share my thinking about the issue. The board of directors has overall responsibility for insuring the continuity of the organization including its financial viability. It is part and parcel of the board’s fiduciary responsibility in representing the community’s sanction being the legal sponsor of the services delivered to the recipients of the services offered by the organization.

What does it mean to be responsible for the financial viability of the organization? It not only refers to approving a budget, authorizing expenditures, and being accountable for the implementation of the budget but also for guaranteeing that there are sufficient funds to conduct the ongoing business of the organization. This means monitoring how the funds are spent, on one hand, and working to insure sufficient income is received during the year to cover the operating expenses on the other hand.

Beyond the yearly functioning of the organization, it is also appropriate for the board to be involved in the financial planning for the future. This is part of the strategic planning process and a plan needs to be developed that will enable the organization to sustain itself during times of economic growth characterized by strong financial markets as well as  during times of slow growth or no growth, much like we are experiencing right now. Of course the major question is what is the meaning of the board having responsibility for the financial sustainability of the organization.

It is not only the approval of budgets and monitoring the monthly finance reports, but also includes being actively involved in the developing and implementing the plan for the financial resource development of the organization. Since the board members represent the community’s sanction and approval of the agency’s functioning the board has the potential to bring together the members of the community in supporting organization. More often than not, board members need to understand the importance of their role in raising funds and soliciting potential contributors for donations as well as learning how to feel comfortable in this role.

Sometimes there is a gap in understanding their role in raising funds between the incumbent officers who are the leadership of the organization and the members for the board. If the agency has not built the raising of funds into the organizational culture then there tends to be a lack of enthusiasm for accepting responsibility for fundraising for the agency. When the leadership has a clear understanding of what it expects from the board then this is communicated to the board members. It is then appropriate to have training sessions so board members can learn how to solicit potential contributors.

It is quite common for part of board meetings to be devoted to the fundraising campaign and to have veteran board members discuss their past experiences in raising funds. Some board members will enthusiastically host small gatherings in their home either prior to an event or for the purpose of soliciting contributions. The ability to participate in fundraising campaigns and particular events has to do with the both the expectations that have been clearly articulated and the comfort level of board members in engaging in these activities.

The professional staff of the agency is usually involved in a number of ways. They should provide support, in terms of background information and producing materials that “make the case” for needed donations. If they are able to train people to solicit contributors they can facilitate group sessions to prepare board members for fundraising activities. Often times, other professional staff members, in addition to the chief executive officer or the executive director, participate in the campaign and actually solicit donors. It is not uncommon for the entire professional staff of an organization to have a staff campaign and to contribute to the organization as a sign of their identification with the organization and the importance of supporting the services in the community.

Last but not least, the board, the staff and the donors’ participation in the financial resource development of the organization can often build a strong sense of “community” and “commitment”.  There is an added value to the two groups joining each other and working together to insure the financial sustainability of the organization. Too often there is a concentration on the raising of money and not enough recognition of the added value of strengthening the organization as an aspect of community building.

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.