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Are Nonprofit Boards Doing Enough to Stimulate Giving?

December 8, 2014

According to a recent study by the Urban Institute, public charities have grown more than any other kind of nonprofit group and now account for more than two-thirds of all tax-exempt organizations in the United States.

Charities now make up more than 963,000 of the 1.44 million nonprofit organizations registered with the Internal Revenue Service. And, the assets of these organizations reached almost $3 trillion in 2012, a 43 percent increase from 2002 when adjusted for inflation.

Despite the increase in assets, however, no one would dispute that having almost one million charities vying for support from potential donors has markedly increased the competition for money. And, as I mentioned in an earlier post (The Nonprofit CEO: Fundraising and Engaging the Board, November 17, 2014), it is primarily the job of the CEO and board of any charity to ensure that the organization has adequate resources to fulfill its plans and to secure its future.

So, how are boards of directors doing in this critical area of responsibility?

According to a recently released study from BoardSource, nonprofit leaders gave their boards an average grade of B-minus in fundraising for their organizations. Trustees were judged to be better at technical tasks like financial oversight than there were at setting strategy or reaching out to the community. 60 percent of CEOs said that the duty that their boards most needed to do a better job at was fundraising.

Yet, most board members give, and often give generously, to their organizations. In 1994, 60 percent of board members gave money to their organizations. Now, that number is 85 percent. Still shy of the 100 percent goal that most boards aspire to, but close enough that this remains a bright spot for many organizations.

But, according to the study, trustees remain challenged when it comes to asking friends, family members and colleagues for contributions. In fact, 43 percent of board members reported that they feel uncomfortable asking for money.

This finding is consistent with other studies I've read over the years. One such study (I believe from the University of San Francisco, but I've lost the reference) reported that:

  • 50 percent of board members find fundraising "distasteful"
  • 75 percent said they would participate in fundraising if they had to, but they wouldn't enjoy it
  • 10 percent said that they would absolutely refuse to take an active role in fundraising, and
  • 25 percent said that they had never participated in any kind of direct fundraising.

The four reasons that board members in this study gave for disliking fundraising were:

  • They perceive it as begging
  • They feel it requires them to take advantage of their friendships to leverage gifts
  • They fear rejection, and
  • They don't know how to do it effectively.

Here are some possible strategies for staff members to try for improving the performance of their boards in fundraising:

  • Have board members buddy up - a pair of board members or a board member and staff member can help ease tensions.
  • Provide fundraising training - don't assume that your board members know how to fundraise.
  • Involve the hesitant in less threatening tasks like identifying gift prospects, organizing special events or writing thank you notes.
  • Coach and mentor inexperienced fundraisers and provide them with opportunities to experience success.

American Express supports BoardSource and other organizations that help train staff and board members in fundraising and other skills. One of those programs is the United Way BoardServeNYC, a program that builds the capacity of nonprofit organizations in New York City by connecting them to a pool of prospective board members. An integral part of the program is training these prospective board members in nonprofit governance and the duties of nonprofit boards.

If you have a question or comment, please follow me on Twitter at @timmcclimon and let's start a conversation there.

Next week: Big Charities and Big Donors


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