Part III of III

By Avrum Lapin

Show Me the Money…

We all remember that memorable line from the movie Jerry Maguire starring Tom Cruise. While the context was clearly different, the essence was the same. Credibility is established by putting “skin in the game.”

In today’s philanthropic marketplace, the nonprofit Board is the place where the credibility is built. If the Board does not give, many will hesitate to participate, yet others simply will refuse. This is not a scenario that any nonprofit in today’s hyper competitive environment wants to face, let alone create.

We are all agreed that Board members are invited to serve for their expertise and their ability to bring programmatic and political assets to the table. In some more traditional circles Board members have been recruited for their ability to “give time” which, at one time was considered an asset on its own with a currency equal to money.

The key difficulty is that you cannot pay the bills with time. Therefore, the thematic message of this post is that every nonprofit must ask every Board member, as part of their fiduciary responsibility, to make a meaningful gift to the organization they are leading. It just makes sense. If a Board member isn’t supporting their organization financially, how can they expect someone less connected to their organization to follow a lead that is not demonstrated.

So how does an organization do this?

• Start with the Board President – he or she must buy in to the idea that all Board members must give. This is not yet a given, even today.
• Create a deadline for Board commitments, along with a suggested gift range that is motivational but accessible by all.
• Make fundraising a part of every Board meeting agenda, and make Board Giving a prominent part of that discussion. Unlike in public forums, respectfully call names and ask why people haven’t yet participated.
• Set a firm goal of 100% participation by each and every Board member in the nonprofit’s Board Giving Program.

And that last imperative is doubly important because increasingly foundations and other institutional funders are limiting their support to nonprofits that can demonstrate 100% Board participation in giving. From their point of view, why should they support a nonprofit whose own leadership won’t set the example? Secondarily, they may question why Board members are not giving – asking themselves “what do they know that we don’t.”

Bottom line … according to a recent Board Source Report, as well as the National Center for Nonprofit Boards, and the National Governance Survey of Chief Executives, only 46% of Boards today report 100% participation. It is not surprising that those same sources list the inability to raise money as the major weakness of many nonprofit Boards, while only 5% listed fund raising as a demonstrable strength of a Board. Fundraising ranks #1 among board areas needing improvement.

Yet actual dollars contributed truly matter less than fact that every Board member makes a gift. And again, while this seems to be an intuitive organizational direction, the notion of “giving time” still carries weight in some places.

One way that some Boards are working their way toward 100% participation is trying to put the fundraising onus on every Board member through a “Give and Get” or Give or Get” approach, often providing a minimum that every Board member needs to “produce” in order to fulfill their responsibility. There is an important difference between these two strategies.

Those organizations that employ the “Give or Get” approach, which still absolves Board members from dipping into personal funds for even a token gift, are unwittingly letting their leaders off the hook. Needless to say, we vigorously endorse the “Give and Get” strategy which requires each Board member to begin by investing their funds as “skin in the game.”

And just a note on “Give and-or Get” approach, even this is waiting to get deep traction in the nonprofit arena. The 2012 Not-For-Profit Pulse Survey found that 77% of Boards do not have either type of policy in place. Further, of those organizations that have “Give and-or Get” policies in place, 35% require less than a $5,000 cumulative commitment from Board members.

What, therefore, becomes the expectation when recruiting members for a nonprofit Board?

In the process of recruitment to a nonprofit’s Board, Board service should be presented and framed as an honor and a privilege, and that honor includes giving. The expectation of Board giving should include a stipulation that Board members will be removed if he or she refuses to make even a token gift.

Looking at it a bit more positively, when Boards actively lead the fundraising activity, nonprofits are more likely to reach their fundraising goals. According to the 2012 Nonprofit Research Collaborative Study, only 52% of nonprofits without a Board level development committee met their 2011 fundraising goals, compared with 63% of those with a stated commitment to development through a Board standing committee exclusively for that purpose.

And if we look at Board giving “by the numbers,” once again from the 2012 Not-For-Profit Pulse Survey and the 2012 Nonprofit Research Collaborative Study, we find the following:

• Board average 74% participation in giving
• 68% of nonprofits have a policy requiring Board members to make an annual gift
• Among the organizations that require a minimum Board Gift, the median was $1,000
• Nearly 3% of nonprofits require a gift of $20,000 or more to be donated or raised by each Board member

In conclusion, let’s reach back to close the loop with Parts I and II, particularly the importance of measuring ROI in our competitive and entrepreneurial fundraising marketplace, and reiterate the fact that Board giving is a multiplier for attracting and obtaining broader and increased giving. In this way a nonprofits greatly expands the probability that it will succeed on the short term and in its quest for growth and sustainability.

Let’s further restate that GIVING is the operative word and basic goal of every successful nonprofit, and the expectation of members of its Board, and that these should be the standards:

• Fundraising is a primary responsibility of any and every nonprofit Board
• Leading by Example is the primary responsibility of each Board member; every member should be able and prepared to say “join me” to friends and associates
• Board members should designate the organization that they serve as one of the principal recipients of their generosity
• Nonprofits should, if needed – and to prepare their leaders for the expectation made of them, invest in training to make Board members more effective advocates (and yes) fundraisers
• Many Board members are uncomfortable asking for money and seek to opt out of fundraising responsibilities, and should not be let “of the hook”

As a nonprofit leader or executive you should always be comfortable saying “Show me the Money,” but should also be prepared to make it happen. Today’s nonprofit leader and major donor will understand the value of investing to increase return. Not investing, not engaging your Board members, and running your fundraising on parallel tracks is, in the final analysis, racing toward the cliff. That solution is not recommended.

Avrum Lapin is the President at The Lapin Group, LLC, a prominent fundraising consulting firm located in Jenkintown, Pennsylvania, outside of Philadelphia. The Lapin Group inspires and leads US-based and international nonprofits seeking fund, organizational, leadership, and business development solutions, offering contemporary and leading edge approaches and strategies. Avrum is a frequent contributor to eJewishPhilanthropy.com and speaker in the US and in Israel on opportunities and challenges in today’s nonprofit marketplace.

The Lapin Group on Facebook: www.facebook.com/thelapingroup

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