Is your board helping you pay the bills?

Judging from the number of nonprofit founders that tell me they need a grant because they have maxed out their personal ability to support their nonprofit, I'd have to say the answer is a resounding "no".

In my white paper, "Climbing the Ladder to Nonprofit Success" (you can get a copy by requesting one here) I explain why depending on getting grants to start a nonprofit, or even winning grant funding in the first year or two, is not a very wise financial plan.

So where do you get your initial funding after you have put all the personal money you can afford into the mission? Normally, it is going to be from your board, your immediate friends and family, small local events or a combination of all three.

Everyone seems to get the friends and family and the small events part, but they don't want to make fundraising a board duty.

There will probably always be a philosophical discussion about whether to set fundraising goals for each board member. I don't understand why that is even a point for discussion.

Admittedly, many people start nonprofits and  ask people they know to be on the board, just to satisfy the legal requirement that they have a board. It is a good bet that some of the people they pick say something like "OK, but I won't have to do anything, right?"

 

Wrong.

The board should be initially a development group. First and foremost they should care passionately about accomplishing the mission, and believe that they can do it. Right after they affirm their allegiance to that idea, they need to understand that missions need money to succeed. Making the board an integral part of that aspect of being a nonprofit right at the start shouldn't be optional.

If founders would sit down and figure out how much money they need in the first two years, cross grants off the list of possible sources, and then approach perspective board members with a honest inquiry as to whether they can contribute to the organization, or at the very least, be willing to go out individually and raise funds to meet those goals, there would be fewer failing nonprofits.

When someone asks me to write a grant and then says the organization is essentially a one-man or woman show, I know that no matter what I do, the grant thing isn't going to happen. That just isn't a model that grantors can support.

Increasingly, prospective funders are starting to ask for a statement as to how much money the board members contribute personally to the organization. At the very least, they may ask for the amount the board as a whole has personally contributed in the past year.

The reasoning behind that question is first, to judge how committed  the board  is to the organization's survival and whether they are taking personal responsibility to ensure that success. Second, if all they see is zeroes or a few dollars from each board member, it tells them that the organizational strength may not be good enough for them to trust with their money. Third, they want to know that the nonprofit has enough reasonably stable funding to stay in business.

Underlying all of those questions is another big one…if your board doesn't support the nonprofit financially, why should anyone else do so?

Many more funding sources are starting to require proof of matching funds before they will fund a program, or they are making an award into a challenge grant. Very new nonprofits usually have a tough time with that, but if the board is willing and able to gather a few thousand dollars toward that requirement, it can open the door to more funding.

For those that feel that accepting board members on the basis of their ability to contribute monetarily leaves out  some otherwise well-qualified prospects, then consider setting a fundraising goal for those worthy but financially challenged people. If asking them to go out and solicit donations puts them off, they will probably never be fully committed in other areas either.

Like it or not, your organization will always be chasing the next dollar. If your board is so passive that they can ignore that immutable fact, it is probably the wrong board.

Having this conversation with your board can be tricky. You don't want to start off by saying "OK, you lazy pot-lickers, it's time to pony up", even if that's the way you feel. Sometimes all board members need is a firm goal to chase instead of a never-ending whine about how broke you are, and they will amaze you. By setting an attainable goal for board contributions, you maximize the chance that they will put some effort into reaching it.

If you aren't sure how to have this conversation with your existing board, or frame it in a recruiting pitch, drop me a line and I can help you present it in a firm but non-accusatory manner.