Some Organizations Just Don’t Get It

Last week I received two phone calls from colleagues who are on the professional staff of Israeli nonprofits with multimillion shekel budgets. Both are frustrated by their organizations’ unwillingness or inability to understand what it takes to be successful at increasing their financial resources and moving toward financial sustainability. These cases, which differ in interesting ways, provide an opportunity for us to understand the difficulties some nonprofits face in changing their approach to what used to be referred to simply as fundraising.

The first case example involves a nonprofit organization that runs a network of schools for new immigrants. In the past most of its funding was provided by the Israel government based on a per capita count of the students; it received funds both for a standard educational program and for enhanced, supplemental programs for the new arrivals. Due to changes in the government’s allocation system as well as its approach to reimbursing organizations for special, supplemental programs, there has been a significant decrease in the nonprofit’s funding.

These changes have caused a financial crisis for the organization and its future has become precarious. In response the agency decided to hire an American fundraiser to seek out and secure additional funds from people in the United States. One of the Israeli- based development professionals asked me a series of structural and functional questions about the American fundraiser:

  • How can the agency evaluate someone’s success as a fundraiser?
  • Should there be a specific job description for someone hired as a fundraiser?
  • How does the person receive compensation? Is it based on a salary or based on a percentage of the funds raised?
  • How should the person receive supervision and from whom in the Israeli organization’s office?

The second organization is sponsored by the Israeli government, which provides its entire multi-million shekel budget. Its overall mission is to reach out to marginally functioning young people and strengthen their engagement in the informal and formal structures of Israel society. Its activities’ specific aim is to prepare these young people for service in the Israel Defense Forces and to support them during their service.

The person who has overall responsibility for raising funds for the organization reached out to me for advice. The Israeli government was cutting back its budget allocation, and in response the agency engaged a consultant. My colleague wanted to know whether the strategic approach to redevelop the board and involve them in fundraising that the consultant was recommending was appropriate.

The first questions I asked both my colleagues focused on the role of their agencies/ board of directors. First of all, is there a board? If so, what is its role? How do the board members understand their involvement in the organization? What responsibilities do they assume for the financial sustainability of the nonprofit organization? What have they been doing to address the crisis that both organizations are confronting at the present time?

Of course you will not be surprised to learn that in neither case are the boards involved in resource development. The board members perceive their role as being purely advisory and that it is up to the staff to make sure the agencies function in an efficient and effective way. In the first case example, the board had not even developed a clear job description for the prospective fundraiser’s role. In the second case, the board wanted no part in the activity of fundraising. I have no doubt that soon both organizations will be forced to confront how and where they secure the resources needed to continue to provide their services.

I believe deeply that the second 65 years of Israel’s existence will focus on Israel’s civil society and how it functions in the context of Zionism today. There are more than 30,000 nonprofit organizations in the country. To support them, Israeli philanthropy has evolved and strengthened to support a myriad of programs and projects ranging from working with kids at risk to educating people to the dangers of smoking and to the necessity for safe driving. Israeli civil society is experiencing a maturational process that involves both an increase in education and training of professionals in the third sector and, simultaneously, the evolution of educated and committed volunteer leaders.

In the last ten years, Israel has benefited from the establishment of Sheatufim – The Israel Center for Civil Society, the expansion of JDC’s Elka Institute for Leadership and Governance’s training program to include volunteer leaders and nonprofit professionals, and the Maslul program of Matan (an Israeli variation of the United Way). These efforts provide opportunities for board members and professionals to learn what it means to be involved in the third sector and how boards of directors (that is the volunteer leaders) have to assume an active role in setting policies, establishing priorities, and maintaining the organization’s financial sustainability.

In the two case examples discussed here, the boards of directors must be an integral part of the organizations’ functioning and become involved in determining their organizations’ approach to raising their needed resources. They must not allow their agencies to follow a Band-Aid approach to fill in the gap left by cuts in Israel government funding. There are both policy and practice issues that need to be discussed, developed, and understood by involved leadership as they assume responsibility for the financial sustainability of their organizations.

In Israeli nonprofits, the paid staff, volunteer leaders, and donors in Israel and overseas have different but complementary roles. Each category of leader must take responsibility for the development of the organization and for providing a system of checks and balances to ensure that the other partners in the enterprise are also taking responsibility and being accountable for their part of the task. We should all work toward the development of a functioning and successful voluntary sector in Israel in which nonprofits “get it right.”

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.