Nonprofit Board Fundraising Duties

Contributed by: Kyle Fritch, Eide Bailly Tax ManagerKyleFritch

Boards have several responsibilities and duties to help fulfill their organization’s vision and mission. They oversee management and finances, set strategic direction, and ensure compliance with legal and tax requirements, to name a few. However, one of the board’s primary responsibilities is to help secure adequate resources to use in accomplishing the business mission. When it comes to the board’s role in fundraising, there is no single right answer. Nevertheless, nonprofit board members should consider focusing on four fundraising responsibilities:

1. Take a Leadership Role in Fundraising – Board members must take a leadership role in fundraising since they essentially own the organization and are responsible for the well-being of the organization and its successes. In addition, supporters and potential supporters see board members as the people most committed to the organization. If the board will not take a lead role in raising funds, why should anyone else support the organization’s cause? One way to accomplish the leadership role is to be actively involved in the development of the organization’s fundraising plan. A well-thought-out fundraising plan (developed in partnership with the board) identifies the board’s role, the amount each board member is expected to give and/or raise, and provides guidance for the range of ways in which they can support the fundraising efforts. Identifying the fundraising tool that best suits each member for bringing resources and people to the organization will only strengthen the organization’s overall success.

2. Leverage Connections – One of the most significant reasons a person makes a contribution to a nonprofit organization is because the right person asks. Although prospective donors must be interested in the organization, it is the people involved, especially those who ask for the gift, that makes people want to contribute. Therefore, board members should look for opportunities to introduce others to their organization and its mission. Making these introductions is valuable to the fundraising effort and provides opportunities to bring attention to the organization’s good work in the community.

3. Give-Or-Get Policy – What is a give-or-get policy? The name speaks for itself. Your board members agree to either donate a certain amount of money every year, or they agree to raise the equivalent from others. The level of monetary commitment is up to the board members. An important reason to implement this type of policy is that major donors, grant-makers, and individuals want to see the level of commitment from boards of the organizations they support or are thinking of supporting. Implementing and complying with such a policy is an effective way to demonstrate the board’s commitment to the success of the organization. Careful planning should be performed before implementing such a policy to insure it will succeed and not drive board members away. Every board is unique and may have different circumstance to consider. Some board members may lack personal wealth or community influence and others may have no experience fundraising. Taking the time to establish rules and procedures that fit an organization’s particular situation will aid in the policy’s success and in gaining compliance from its participants.

4. Oversee Your Organization’s Fundraising Efforts – As a board member you have the fiduciary duty to maintain financial accountability of your organization. Rather than taking a passive role in the fundraising efforts, board members should monitor the organization’s progress towards its fundraising goals. At times, staff members can become inundated with the day to day operations and may not realize a particular activity is under-producing or lacks the funds to be successful. By exercising oversight at a higher level the board is in a position to evaluate funding priorities and make recommended corrections.

Ultimately, the missions of nonprofits are important, but without funds, the organization cannot effectively function. By taking a leadership role, leveraging connections, and overseeing the organization’s fundraising efforts, board members can meet their fiduciary duties and secure the funding needed to fulfill their organization’s mission.

 

One funding opportunity, for 501(c)(3) organizations located in AZ, CO, MN, and UT: http://www.eidebailly.com/industries/nonprofit/resourcefullness-award-home

 Apply for the Eide Bailly Resourcefullness Award by Wednesday, August 12th.

Opportunity, Actually

In the spirit of Valentine’s Day, we start this post with a quote from the feel-good movie Love Actually:Sunset in frame

Whenever I get gloomy with the state of the world, I think about the arrivals gate at Heathrow Airport. General opinion’s starting to make out that we live in a world of hatred and greed, but I don’t see that. It seems to me that love is everywhere. Often, it’s not particularly dignified or newsworthy, but it’s always there – fathers and sons, mothers and daughters, husbands and wives, boyfriends, girlfriends, old friends. When the planes hit the Twin Towers, as far as I know, none of the phone calls from the people on board were messages of hate or revenge – they were all messages of love. If you look for it, I’ve got a sneaky feeling you’ll find that love actually is all around.

Hugh Grant’s character points out that though gloom is so often the focus of our attention, good overshadows bad – if you just look for it.

And there’s no better industry, as far as we’re concerned, than the nonprofit industry when it comes to finding the good and the opportunity in all situations. We are constantly inspired by the things we’re hearing, so the short summary below is just a small taste of what we’ve heard about recently that has us nodding, smiling, and doing little fist pumps in the air.

FUNDRAISING:

Two brothers out of Utah built an app called KiwiTree, which allows users to donate their “change” by rounding up each purchase to the next dollar. It’s still in beta testing, but will provide a new vehicle for facilitating donations.

INVESTING IN COMMUNITY:

A group of a dozen Community Foundations convened to discuss shifting investments toward place-based impact investing; this means pulling investments out of Wall Street and focusing on their own communities instead.  A Huffington Post article reporting on this meeting notes that, “The opportunity – or better yet imperative – ahead is the alignment of assets to mission:  the integration of philanthropic gifts and investments for the health of all people in the community where you live.”

Similarly, the Hutton Parker Foundation, out of California, uses commercial real estate as a philanthropy tool and a method for investing in community. As an example, the Foundation recently purchased a building that will be used to create a “foundation center” that will allow the sharing of resources and networking benefits, similar to what you see with start-ups in a tech incubator.  Read more about this exciting approach in this article.

COLLABORATION:

In their 2015 Annual Letter, the Bill and Melinda Gates Foundation outline their “Big Bet”:  that in the next 15 years, we will see major breakthroughs for most people in poor countries.  Their big bet requires the involvement of people and they place a call to action for involvement and sign up at globalcitizen.com, a website that goes beyond one organization and, instead, pulls together the work of many to reach the common goal of ending extreme poverty.  This is a good reminder that there is opportunity to achieve mission outside of an individual organization’s “walls.”

 

What opportunities are you seeing in the industry that have you feeling googley-eyed?

Seven “Cool” Donor Outreach Characteristics of the Ice Bucket Challenge

Stende ice bucketAt Eide Bailly, we are interested in nonprofit revenue generation and have established an award to recognize creative and sustainable revenue initiatives. So, we took special notice when dumping buckets of ice-cold water became a “thing” in summer of 2014 as millions of people participated in the ALS Ice Bucket Challenge. The Challenge was simple: donate $100 to ALS or post a video of yourself dumping a bucket of ice water on your head. Then, challenge three of your friends to do the same. This simple campaign generated more than $115 million dollars for the ALS Association.

Nonprofits around the globe were green with envy of this movement that required no effort or expense by the organization itself. No doubt, this exact effort cannot and will not be duplicated again. However, we can use this as a case study as we think about the psychology of donors and how we structure and implement future revenue generation campaigns.

Here are the 7 “P” characteristics that we’ve identified in connection to this movement that you can reference as you plan your next revenue generation initiative targeted at individual donors:

PUBLIC: The Challenge was public in nature, with videos and photos being posted on Facebook, Instagram, and throughout mainstream media. You saw images of this Challenge everywhere you looked, which allowed donors to be recognized by the communities of people they most care about having an opinion of them, including family, friends, co-workers, and clients.

PRESTIGIOUS: Participating in the Challenge immediately moved participants into a growing and “prestigious” club filled with celebrities, politicians, and admired contacts.

PEER PRESSURE: Each potential donor received the Challenge, not from the nonprofit organization itself, but from somebody they knew personally. Being asked to do something by a specific person with whom you have an existing relationship is a game-changer.

PLAIN INSTRUCTIONS:   The Challenge was simple: either donate or dump a bucket of ice water on your head for all to see on video. And, participants also had the requirement of passing on the Challenge to three others.

PRESSURE OF TIME: These instructions also included a deadline; donors were given 24 hours to act. All of us are more responsive to specific deadlines. If we feel like our timeframe for acting is unlimited, then we will often take an unlimited amount of time to make a move. This piece was critical to the success of the Challenge.

PARTICIPATION: The Ice Bucket Challenge required participation. Involvement with the ALS was not limited to a simple credit card transaction. Some aspect of your donation process required that you do something more than give money – you had to acknowledge the Challenge you received and then publicly (going back to #1) respond.

PAIN: This Challenge required a degree of pain. Oddly enough, there is research by two university professors who conducted a series of five experiments, that shows that a willingness to contribute increases when the process is expected to be painful and effortful rather than easy. This explains why so many fundraisers (e.g. races, polar plunges, the ice bucket challenge) successfully include some aspect of pain.

What do you think? What else make a difference in individual donor response?