Blog Categories
Past Posts

Archive for September, 2013

All Fair in Love and War?

This recent tweet from American Management Association http://ow.ly/pcQFg (@AMAnet) poses the question: Should you recruit your competitor’s talent? In the nonprofit world, I believe the answer is “yes.” In skill positions like Development Director, it requires seeking experienced practitioners. And best bets are usually people who are currently gainfully employed at another nonprofit. Likely a competitor of yours. The posted link above has some good recommendations on how to make your move.

Post to Twitter

Share

Launching a Nonprofit Major Gift Effort in the Right Frame of Mind

We read about the importance of seeking board members with “deep pockets.” Meaning: having lots of money that they will gladly give to our cause. Starting a board recruitment effort with this in the forefront of the brain will not work out well. Usually. And here’s why.

People become involved with a nonprofit, generally because they first and foremost feel a kinship with your mission. The Governance Committee working with the CEO is best served when the group seeks relationships with individuals who care about the cause. And want to be involved in some way. Giving to the cause is just one aspect of best board search practice. There’s also networking, which includes speaking with friends and colleagues about the mission; telling friends why they are involved.

It is true that you gotta ask to get. And if your nonprofit board has folks with “deep pockets” they can help find friends who will join, support the mission and give because a good friend asked. This is not bad. But in my work with nonprofits, I like to get the relationship focused on mission. So it’s clear that the cause and the people we’re helping are our primary purpose in being involved. Yes, we want to launch a major gift effort to help further advance the mission of our nonprofit. But we want to be clear that it’s the relationship to the mission first and foremost; and that the funds we are seeking will clearly help advance that mission.

When a nonprofit organization decides to launch a major gift campaign, the development committee begins its work looking at the donor list…those who give to the annual campaign…and “qualify” individuals who have the wherewithall to commit at a “major” level, however the nonprofit decides to define it.

From my experience, people with significant resources are not always eager to join the board. But when approached in the right way by the right person, they may be inclined to contribute to your major gift effort. They, like most of us, want to make a difference. When we find something that looks properly designed and has a good team implementing the work, it’s easier to say “yes.” Make the gift. Perhaps over time the relationship will blossom. And Mr. or Ms Deep Pockets will commit to a term on the board.

The moral of the story: don’t make “deep pockets” the focus of your board recruitment. Or fundraising, for that matter. It becomes apparent to people rather quickly if they’re being pursued for $$ and not for commitment to mission.

Post to Twitter

Share

Dine Out in Support of No Kid Hungry

Visit www.nokidhungry.org for restaurants participating in September program to support this nonprofit organization.

Post to Twitter

Share

Inside the Box of Board Governance

Over time, this blog has covered the waterfront on topics from board development to marketing strategy to basics of fundraising. Today, I’m revisiting a topic I aired out many moons ago: Parameters that apply to nonprofit Board governance.

We hear a lot about thinking “outside the box.” Which can be great fun. But first it’s good to know the box we’re living in: the bylaws, rules and regs for 501(c)(3) status, laws in the Sate where we’re incorporated, and fiduciary responsibility of boards according to accounting (AICPA) standards.

Board members must be aware of the bylaws that govern their work. Each member should have a Board manual, and prominent in the manual must be the bylaws of the nonprofit organization. Beyond mission and purpose set forth in this document, it usually contains the rules of the road for the Board: how often it meets, what it’s responsible for (usually oversight of the nonprofit tangible assets), attendance requirements, term of office, election of officers.

Board members also need to understand what the IRS requires when it bestows 501(c)(3) status. There are requirements limiting lobbying. There are requirements to file documents with the IRS annually when it achieves a certain budget size. There can be no self-dealing where members of the board profit at the expense of the nonprofit. There are areas of unrelated business income when nonprofits do, in fact, pay taxes. The Board should be aware how this applies.

Each nonprofit is incorporated in a State and must comply with nonprofit State law. There are requirements unique to each of the fifty States. The Secretary of State or Attorney General may have reporting requirements. The Attorney General’s office may have a department devoted to investigating and enforcing nonprofit law. On the State website there are usually PDF’s of rules and regulations that apply. The nonprofit executive should identify the applicable documents and provide copies of the most important ones to Board members for their manual.

The fourth item on today’s list is fiduciary duties of a nonprofit Board. Regular financial reports from staff capable of issuing documents that give a good representation of expense and revenue, update the balance sheet, indicate cash flows for the period, and compare financial position month-to-month with the previous year, and compare actual against the budget. The Treasurer and/or chair of the finance committee present a report on updated financials at least quarterly if not monthly. There are members knowledgeable about finance on the Board, there is a senior staff member who understands and issues the reports, and there is a capable staff member entering revenue and expense items on a timely basis.

The nonprofit Board members who know these basics are best equipped to make sound decisions on behalf of the nonprofit. They know, when asked to think outside the box, what’s in the box and how comfortable they can be moving in a new direction, undertaking a new program, launching a new fundraising activity.

Board members in the know can sleep soundly. They know the deal.

Post to Twitter

Share