Top 10 Excuses Board Members Make For Not Contributing to their Nonprofit’s Annual Fund (and why you should never accept any of them)

Donation 1Trustees are the bellwether. They provide the leadership. If they are not giving generously themselves, if they are not out there asking for money, the organization is going to have some problems.”   – Thomas Wolf, Managing a Nonprofit Organization in the 21st Century

The issue of board giving is a sticky one; particularly among new and emerging nonprofits and board members whose experience and scope may be limited, in terms of the roles and expectations of a trustee with fiduciary responsibilities for their respective organizations.  In my role as a nonprofit executive director, board chair, program director, and now development consultant, I’ve heard a lot of excuses for why board members can’t or shouldn’t be expected to contribute a personally meaningful and sacrificial gift to the organization’s annual fund.  As a person who “walks her talk”, I don’t accept any of them and neither should you.  Your organization and the work it does is far too important.

Stop me if you think that you’ve heard this one before…

10.      “I give my time; so I don’t have to give my money.”

When your executive director can walk into the office of the utilities office and declare that she’d like to pay the electric bill with her board’s donated time, then this excuse will begin to have some traction.  Until then, board chairs and fellow directors should never accept this as an adequate measure of ‘standards of care.’  Even for “working boards” (the context from which this particular statement usually springs), you should expect to contribute your “time, talent, and treasure”.  You can’t pay salaries with time, as noble as your volunteer efforts are.

This particular excuse is a favorite with my colleague Dave Sternberg (Loring Sternberg & Associates).  As he is fond of saying, “Yeah, everyone gives their time. Time does not pay the bills or for programs.”  It may be a bitter pill to swallow, but consider it ‘tough love’ in the interest of elevating your organization’s fiduciary standards of care.

9.    “We’re not wealthy people.”

It’s probably best to address this particular excuse for not contributing with a quote from Thomas Wolf, author of Managing a Nonprofit Organization in the 21st Century.

“There is practically no one sitting on a board of trustees who cannot afford to come up with $10 once a year, and most people can probably come up with $50.  Special exceptions from time to time can be considered on a case-by-case basis; this should be no excuse for the absence of a stated policy on board contributions.”

What we’re referring to here is a personally meaningful and sacrificial gift.  It doesn’t have to be a lot, but it should “hurt” a little.  Why?  It demonstrates that you’re emotionally and financially invested in the organization’s mission and future – you’ve got some ‘skin in the game’.  For some people, $1,000 may be “personally meaningful and sacrificial”.  For others, it may be $100, and for still others it may be $10.  Why not consider making monthly installments on your annual board gift?  Not only will barely miss the small monthly amount, but you might even consider a larger gift because it doesn’t hurt as much!

Remember, it’s not how much you give, but that you give.

8.    “We’re not that kind of board.”

What kind of board do you mean, exactly?  The kind of board entrusted with fiduciary oversight and standards of care?  The kind of board responsible for ensuring adequate financial resources?  The kind of high-performance board that “walks its talk”?  Regardless of “what kind” of board your organization has – working, fundraising, or governance – as a board member, making an annual gift is a non-negotiable responsibility . . . and an honor.

7.    “I’m on four other boards; I can’t give to all of them.”

A board member who serves on many boards is very likely not serving any of those organizations to the very best of his/her ability, and that manifest itself eventually.  For most, their hearts are in the right place; others seem to need the recognition of serving on multiple boards as a badge of social status.  Whatever the case, you have a reasonable expectation of your board members to place the organization among their top three philanthropic beneficiaries.  A board chair might consider approaching an over-stretched and under-performing board member in this manner, “Ilene, I know you’re very dedicated in your service to multiple boards in our community.  We value your service tremendously and would love to see you become more deeply engaged with and committed to the mission and programs of XYZ.  What would it take to move XYZ to the very top of your service and philanthropy list”?  It may seem like a rigorous standard, but isn’t your organization worth it?  The executive director, who is subordinate to the board, should never deliver such a message to a director, regardless of his/her personality type or style.  It’s a dangerous precedent and undermines the authority and credibility of the board chair.  Having said that, the alliance between the executive director and his/her board chair must be strong and unified in order to advance and impose high standards and uphold accountability.

Donation 26.    “I wasn’t told that there was an expectation to contribute financially.”

As the saying goes, we get the boards we deserve.  A huge oversight of many small and emerging nonprofit boards is that they lack a board member job description – the roles, responsibilities, expectations and policies associated with being a trustee in your organization.  This would include a requirement for board giving.   The board member job description should also include minimum requirements for helping the organization in other fundraising activities, event attendance, board meeting attendance, committee service, etc.  A Google search of “Nonprofit Board Member Job Description” will yield a number of useful documents.  If your organization only does one thing to improving board performance and engagement, let it be this.

A note on ‘minimum entry gift amounts’… for well-established and/or fundraising boards, a minimum annual gift requirement may be the way to go.  Alternatively, for new and emerging nonprofits, you may lose some very well-qualified prospects if the minimum contribution amount is too high.  Your board giving policy might include a suggested range or better yet, as alluded to above, simply encourage each board member to give generously according to his/her means (a “personally meaningful and sacrificial gift”) or make a gift on a 12-, 6-, or 3-month installment plan.

5.   “I give money because I want to, not because I’m pressured to.”

It’s incumbent upon a board member to make gift to the organization’s annual fund.  Period.  When I heard this statement from a board member, it was an adversarial position.  Nobody was going to tell him what to do!  I couldn’t help but wonder about what other issue(s) this board member would ‘dig in his heels in’ and refuse to budge.  If a board member doesn’t feel committed enough to the organization to want support it financially, that’s a decision that should be respected.  However, the board chair should have a one-on-one meeting with the reluctant board member in an attempt to finesse a persuasive position as to the importance of board member gifts.   If the director cannot/will not be persuaded, the board chair should ask the person to serve in some other capacity, perhaps on a committee.

There are many ways in which to serve a nonprofit organization – only one of which is fiduciary oversight through board service.  This strategy can only be effective under the following circumstances: 1) the board chair is a strong leader; 2) the case for support is clear and compelling; 3) there is an organizational policy on board giving; 4) there are board-approved accountability standards (“give, get, or get off”) for failing to uphold the board giving policy.  The board needs to uphold the high standards it adopts.

4.     I’ll make a contribution if the organization hires my friend (or relative, etc.)

Wow, talk about a conflict of interest and impropriety!  And yet, it happened to a colleague recently.  Board giving should never be based on quid pro quo services.  I like to imagine that such statements come from those who simply are not aware of best practices and/or nonprofit obligations to safeguard against conflicts of interest.  For the latter, the Internal Revenue Service now requires nonprofit boards to have an organizational Conflict of Interest policy, which must be acknowledged and signed off on by directors annually.   For the former, I would suggest that the board’s governance committee develop a “Best Practices and Organizational Compliance” policy, which should be included in board member orientation packets and distributed annually for review.   Quid pro quo?  Really? Don’t be that board member… it’s an extremely awkward situation for all involved.

3.    “I’ll give a gift when…..” (I sell my house, after the holidays, if there’s anything left after vacation, after the recession, etc.).”

As with so many things in life, the perfect time is… now!  Imagine how you’ll feel when you write that check.  You’ll feel great knowing you’ve done your part to help an organization with which you are deeply connected.  If you can’t afford the entire amount of your gift right now, no problem!  Make an installment right now – you can always arrange a convenient payment plan.

2.    “Funders shouldn’t require applicants to have a 100 percent giving policy.  It’s not fair to us small nonprofits.”

Increasingly, foundations are establishing a “100 percent board giving prerequisite” as a part of their application process, and they may request proof of your claim.  The Annenberg and Kirpatrick Foundations are pioneers in elevating standards for nonprofit board performance and organizational expectations with regard to this critical piece of financial sustainability – kudos to them!

In a recent conversation with Paulette Black, a Program Officer at the Kirkpatrick Foundation, she told me, “If (boards) don’t sacrifice for their own cause, why should we?  We ask them in a follow up call. Typically then, our trustees might delay a funding decision until we receive a formal letter from the organization, indicating they have reached 100%. We hear back from them that the executive director appreciated the opportunity to have the discussion with their boards and have received contributions from them as a result.”

The 100 percent board giving expectation is a sound one – for all nonprofit boards, regardless of size.  In terms of a benchmark indicator of financial success and potential, it’s truly the lowest-hanging fruit for your organization.  Foundations and donors expect your board to contribute to the financial well-being of the organization.  For this reason alone, board members should be forming a veritable conga line to make their annual gifts.

I especially like the idea of including a letter from the chair certifying that the board is 100 percent giving; it’s a wonderful nod to the organization’s having a healthy culture of philanthropy and says a lot about its capacity for growth.

1.    “I’ve never been asked”

Ah, here’s an interesting phenomenon.  Unfortunately, many organizations don’t have a formal solicitation process in place for board members.  Board members are special; they’re the organizational standard-bearers of governance, financial oversight, and strategic vision.  Consequently, they shouldn’t receive the same appeal letters or phone calls that all other donors and supporters receive.  Instead, they should be solicited personally and individually, preferably by a fellow board member – not the executive director or development director.  However adept both may be at fundraising, they these positions are subordinate to a director.  Nothing is more powerful than one peer soliciting another peer in fundraising.

A highly effective strategy advocated by the Annenberg Foundation’s Alchemy program is to appoint a “board champion” – a board leader or chair of a committee – who is responsible for soliciting and documenting board gifts from their peers.  The active involvement of board colleagues in cultivation and solicitation activates the power of peer relationships and adds credibility and authenticity to the organization’s standards for board support.

Throughout my career in the nonprofit sector, I’ve been an executive director, a board chair, a development consultant, and a board champion, and have had to solicit gifts in all of these capacities.  The best fit – the one that excites me most and which I find the most fun – is that of the board champion.  Soliciting a gift from a peer feels more authentic – you’re simply sharing a mutual passion and finding ways to give it traction to manifest changes in your community.   What could possibly be more awesome and transformative?

So… Are You Convinced?

Recently, I started my own nonprofit consulting and coaching business.  There were a lot of upfront expenses and it was a challenging year for me, financially speaking.  Still, I feel so strongly about the two organizations on whose boards I serve that I didn’t hold back on my annual gifts, which were in the four-digit range.  Was it sacrificial?  You bet it was – ouch, it hurt.  On the other hand, the immense satisfaction I felt in supporting these organizations made it an absolute joy to turn in my checks to my chairs.  Of course, I also donate my time and skills – lots of it – to the organizations.  I know that all of my contributions are appreciated, used effectively, and help the organization make the world a better place for the communities and causes they serve.  I only wish I could donate more!

Donation 3My financial contributions also motivate me to ensure that my personal support is being used effectively and efficiently by the organization.   It also helps me – as a board champion and fundraiser – to ask for donations on behalf of those organizations because I have a “dog in the fight”. Donors definitely respond to that – happily so – because I can clearly articulate my passion for the mission and work of organizations for which I am a fiduciary trustee.

I like to waste a lot of energy on the complaints of executive directors or board chairs who berate board members for “not doing more”, including giving annual gifts.  Most board members who under-perform or don’t engage in their duties do so because they are unaware of what is expected of them – they were never told upfront.  It’s the executive director’s and board chair’s responsibility – collectively – to educate and change the culture of the organization from the top-down.  If there are no policies for board gifts or a culture of giving –  start one today!  Don’t whine and complain about it; you’ll just sour a potentially amazing and powerful relationship.  Take the position that positive change can and will happen… with time, effort, and education.

In my experience with the nonprofit sector, I’ve found that board members in general will strive to reach high standards when they know what’s expected of them. They’ll perform exceptional team work, contribute countless hours, donate extraordinary amounts, and direct their collective talents toward advancing a great cause about which they are passionate.

Conversely, if trustees don’t understand their roles, responsibilities, and expectations, this enormous collective potential is reduced to a trickle, resulting in a frustrated and stymied staff and board.

A final thought:  When you do achieve 100 percent board giving, herald it from the rooftops and celebrate as an organization.  Among small and emerging nonprofits, you’re exceptional!

Nonprofit board members…. what do you think about the concept of “100 percent board giving”?  What are your thoughts about the importance of a “give, get, or get off” policy?  Do you have experiences you’d like to share? I’m looking forward to hearing from you!

Cheryl M. McCormick, Ph.D., Founder and CEO, Ascend Nonprofit Consulting and Executive Coaching, www.ascendnonprofits.comcheryl@ascendnonprofits.com

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