Remember the fable of the elephant and the blind men? A group of blind men come upon an elephant and seek to learn what it is like. They each touch a part of the elephant, but only one part. The man who feels the trunk thinks the elephant is like a serpent. The man who feels the tusk thinks the elephant is like a spear. And so on. Though each man was partly right, on the whole, all were wrong.
If you focus on a single part, you miss the big picture.
For board members to effectively participate in fundraising, they need to understand the big picture of how your organization is funded. Understanding the fundraising mix—the combination of earned and contributed revenue that finances your programs and services—enables them to not only make good programmatic and financial decisions; it also gives them a context for their own participation in fundraising. It can be a powerful tool for board engagement.
Explain the Funding Mix
As you present your funding mix to your board, make sure you do the following:
Create a bridge from mission to money. Mission motivates self-action. While your conversation with your board will focus on funding, acknowledge that funding is not an end in itself—it provides the fuel needed to run the programs and services that advance your mission. By grounding the conversation around mission, you create a bridge between passion for programs and action around fundraising. Demonstrate the translation of mission to money by explaining which revenue streams fund which programs and services.
Articulate the revenue streams. Many nonprofit organizations rely on a combination of earned income (e.g. fee for service, ticket sales for performances, government contracts) and contributions (e.g. annual giving program, major gifts program, special events) to fund their organizations. It is helpful for board members to understand how both earned income and contributions fund the organization. A board member may mistakenly think that if an organization collects fees for services, its fundraising needs are not that great. Explain the percentage of total revenue that each source provides, and the type of funding that each represents (e.g., restricted or unrestricted funds; annual, capital, or endowment funds).
Next, drill down to take closer look at contributions raised through the combination of fundraising activities that your organization undertakes (that is, your fundraising program). Many board members may be familiar with one aspect of your fundraising program, such as a special event or direct mail, but they may not know or understand the full scope of all of your fundraising activities and how they work together. Mapping out your fundraising program provides an opportunity for you to get really clear about how you raise funds, and to demonstrate to the board that fundraising is a multi-step process of building relationships with individuals and institutions, not a one-time "ask" for money.
Clarify roles. As part of mapping out your fundraising program, you also should be clear about what it takes to succeed, and on the roles the chief executive, the development staff, and the board members play to achieve that success. Be sure to highlight where board members can add the most value to the fundraising program, and explain how the staff support board members in the process.
Says August Napoli, Cleveland Museum of Art deputy director and chief advancement officer, "You want to show...that everyone has a role in the program, and that 'We can't do this part without you, Mr. or Ms. Trustee.'"
Help boards understand the investment of resources needed. It's also important to help board members understand the investment of human and other resources that are needed to make the fundraising program successful. Many development staff say that they are often asked to raise funds to meet budget goals that they have little input in, and often without the resources needed to meet those goals. A comprehensive dialogue with your board about fundraising presents an opportunity to discuss achievable financial goals and the resources needed to make those goals.
Help Your Board Own the Discussion
While all boards benefit from having a better understanding of the organization's funding mix, it is especially helpful to provide this context if you are introducing change, such as a change in your fundraising program or a change in the expectation of how and to what extent your board members are involved in fundraising. Use a method that solicits input, provides analysis, and builds board member understanding. When people understand how something works and why it is important, and they have had an opportunity to give input and feedback, they will be more invested in the final results.
Consider the following story from Denise Nelson, vice president for resource development at PENCIL. "Last year, for the first time, we had a shortfall in funds raised at our gala, which is the main source of our contributed income. So the board decided to form a resource development committee to look at how the board should be more involved in fundraising. I think the rest of the board thought that the committee and staff would come back with a list of names for each board member to contact, but instead we decided to start by taking a step back. Over the next three board meetings, we presented an analysis of the organization's fundraising history, our current fundraising channels, and how other organizations approach board giving and fundraising. We didn’t present new fundraising ideas as 'This is what we want to institute here.' Instead, we said, 'As part of our due diligence, we want to share with you some of our findings.' So, we showed them the fundraising practices and policies of other peer nonprofit organizations, and we explained the reasons why they follow those practices. Board members asked questions and gave input, and members of the resource development committee also shared their thoughts about the findings and what they thought might work for our organization. At a subsequent board meeting, the resource development committee proposed a new board fundraising model, which was approved. So we followed a slow but steady process of building understanding and allowed plenty of time for people to ask questions and give feedback. In the end, the change went forward because it was really a 'no-brainer' at that point—people felt like it made sense and was the logical solution."
Getting board buy-in for something that is new (and for something that is perceived as difficult, as fundraising often is) is not easy, and sometimes you may need to focus on recruiting new board members to move the fundraising conversation forward. But in many instances, good process can make the difference.
Here's how you can develop an approach that can lead to board member buy-in for your fundraising program and their participation in it:
Find your board champions for fundraising. Start the dialogue about fundraising with your board leadership and those who are most supportive of fundraising, such as the board fundraising committee chair or committee members. The support of this initial group of board members is critical, so view them as partners. Your full board discussion about your fundraising program and the board's role in it will be better received if the conversation is being led by other board members rather than the staff.
Prep board members early and often. It's helpful for board members to have an opportunity to digest an idea before discussing it at a board meeting. Some board members may feel more comfortable fleshing out an idea in a smaller group or one-on-one with the chief executive, development director, or committee chair first. This gives them familiarity with the issue so that they can participate more productively in the boardroom discussion. Says Hedrick Belin, chief executive of the Potomac Conservancy, "To make sure that my board members really understand and own fundraising decisions, I give them multiple ways to learn and discuss the issues before the board meetings. My development director and I have drafted concept papers with ideas around fundraising that we've shared individually with board members to get their feedback. We've done this with the board fundraising committee as well. So when we take the issue to the full board meeting, it has already been vetted by several board members. This helps them to be able to take a lead in the discussion."
Widen the scope of your "development report." Board meetings often include a presentation of a development or fundraising report. Use this time to educate board members about the bigger fundraising picture, e.g., trends, opportunities, risks. Says Lea Harvey, vice president of development at Resources for the Future, "In my development reports to the board, I present much more than just the numbers against the goals. It's more of an analysis of how we are doing based on the current landscape and where we see it going. I also highlight the risks and opportunities we see emerging. And this is presented within the context of the strategic goals of the organization. So, it's not just the numbers in isolation; it's about providing a basic understanding of fundraising and how it ties to programmatic goals."
Tap into outside expertise. Consider bringing in a consultant or board member from a similar nonprofit to talk to your board about different fundraising activities and what board member engagement looks like in each. Some nonprofits have reported that an outside consultant with fundraising expertise and no personal stake in the outcome brings more credibility to the discussion.
The preceding is a guest post by Kathy Hedge. We invite you to learn more about this book and BoardSource's other fundraising resources.