NonProfit Boards and Funding

One of the big opportunities nonprofits have is to carefully understand the best roles and responsibilities of their board.  Whether a board of elders in a church, a board of directors or a board of trustees, organizational needs for the right type of board members changes over time.  Understanding when it is time for the board to be involved in fund raising is key to expanding mission and ministry

Role of the CEO is key

When does the board become fully engaged in fund raising?  That question is best answered by looking at the position of the chief executive officer.  This title is arbitrary and some organizations may call this key leader the president, the general manager or director or in the church world, a senior pastor.  However, the actual functions of management that the CEO is charged with fulfilling tell us much about their role as well as the role of the board.

The traditional functions of management are planning, organizing, directing and controlling and if the CEO is charged and fully responsible for these classical functions, than likely we have a true CEO and the board can take on other responsibilities.    Also, as the organization ‘matures’, there are more opportunities for the board to take on more strategic roles regarding fund raising.

The three phases of board maturity

I’ve discovered that all boards are not created equal, nor should they be.   While all board have the fiduciary responsibilities of governance, few if any need to spend all of their time on governance.    Annual executive compensation reviews, budgets and a financial audit take only a portion of the time leaving the board with other opportunities rather than responsibilities.

When a nonprofit is in its Developmental Stage, typically in the first few years and with revenues of less than $100,000, the members of the board of directors are likely the key volunteers.  They are idea people and dream with the founder about future possibilities.  Their selection and appointment to board status is simple, often not even formalized and usually happens through friendship rather than any strategic plan.

In the Growth Stage, typically in the second through fifth year of the organization and when revenues are still less than $500,000 to $1 million annually, the board of director’s role begins to change.  Rather than volunteers, these board members are key partners in the ministry.  CEO’s look for skilled people to fill these roles that provide expertise and service that otherwise would need to be purchased or gone without.  Attorneys, tradespeople, skilled technology people are great finds for these boards and they help out with services provided in-kind.   Governance becomes more important but board members are strategically selected for what they can bring to this growth stage of the enterprise.

The ultimate stage is the Expansion Stage, and the organization is likely more than five years old with revenues in excess of $1,000,000 annually. While less than 30% of all nonprofits ever get this large, there are still much more ministry that can be accomplished but the thing that is lacking is money.    The board of directors’ emphasis should be shifted to that of fund raising and board members are selected based on their networks of friends and associates.   These are connected people rather than skilled people (i.e. Growth Stage).  They are ambassadors of the mission and ministry.  They are the best people to be involved in growing the funding base.

Here are just a few ways for these board members to get involved in the effort. 

• Network!  Network is not fundraising, it’s just natural

• Host a Table!  Always have a list of upcoming opportunities and invitations ready

• Coordinate a Grant Writing Initiative (City, County, State, Federal, Philanthropic)

• Strategically create a list of top influencers to meet

• Plan an event at your club/home/work

• Host a lunch each week with a new prospect

• eMail, call or visit with donors just to say thanks

• Tell people why they serve as a board member

• Identify and recruit an in-kind service

Board Members that understand the opportunity to be involved as an ambassador build a stronger and more stable funding base.  They have the opportunity to be a key part of the growth and success of the organization.  They build a lasting legacy and transform hearts.

Reprint from ChurchExecutiveMagazine December 2012

Be Effective; Efficiency is over-rated

Our primary objective should always be to be effective.  Take a look at the dictionary definition of what it means to be effective:  To be adequate to accomplish the purpose; producing the intended and expected result; producing a deep or vivid impression; prepared and available for service.

This definition looks like exactly what we are to be about in ministry.   All too often we strive for efficiency at the expense of being effective.  In ministry, and particularly in our large churches, too much of an emphasis on efficiency can take something that is to be very personal and very hands-on and make it very impersonal and distant.

The church is told to "make disciples".  Jesus demonstrated that one of the ways to be effective in developing disciples was to actually spend three years with just twelve of them.   Jesus and his disciples were together in the desert, on the mountains, in boats during the storm and through some difficult times.

Often there may be short cuts we can embrace but typically while we may be convinced we are being efficient, we aren't necessarily effective.  I lived in Mexico for almost three years and I learned that particularly in Latin America, developing relationships takes time.  It takes time and effective leadership that allows us to transfer skills and a passion for people.  To effectively train and disciple others we need to provide feedback, offer suggestions and demonstrate support.

If our objective in ministry is to train and develop others that are to become effective in ministry then we are following the Biblical mandate.  Christ gave us (who are called to lead in ministry) "to equip His people people for works of service, so that the body of Christ may be built up" (Eph 4:12) 

Now that's being effective!

Committees don't work

It doesn't surprise me at all that the 'Super-Committee' that was suposed to be coming up with a way to shave $1.5 billion from the national deficit is going to fail. This bi-partisan Congressional committee was doomed from the start.

Committees usually fail.

It has been said that a "Camel is a horse, designed by committee".

All too often, leaders that are undecided, faced with a difficult task and usually unwilling to make a decision will choose to delegate the decision making to committee. Committees, by definition, require a group. They are subordinate to the governing body or leader that appointed them and because the decisions, recommendations and findings are the responsibility of the group and not any individual, personal accountability is avoided.

Many are familiar with the phrase "Death by Committee". In order to avoid major problems in decision making here are three short pieces of advice:

1) Avoid forming, serving on and embracing committees. If deliberation and investigation is necessary, make it the responsibility of one person who can assemble a team to carry the load.

2) Don't confuse collaboration with the need for a committee. Teams often collaborate and all good leaders are collaborative. Collaboration adds value.

3) Make the hard decisions and own them. Difficult decisions are unpopular but that is when true leaders step forward to move organizations and movements forward.