Should the CEO follow or lead the board in fund-raising?

Should the CEO follow or lead the board in fund-raising?

By Eugene Fram

In my opinion, the CEO should be a leading partner with the board in development. He/S is the advanced guard when it comes to fund-raising. First to be successful, she/H has to be alert to all places where the CEO can raise funds on his/her own initiative. This involves everything from developing grant requests to understanding national and local sources that may support the organization’s goals. Hopefully, there is at least some part-time staff to assist the CEO. The survival of many nonprofit organizations can be linked to the CEO’s ability to raise funds

The CEO’s next responsibility is to work closely with board directors who have development backgrounds, skills, contacts and the interest to expand the efforts to attract resources from a wider range of organizations and individuals. This is usually a small group. Although some directors may be affluent and may make substantial contributions to the organization themselves, they may hesitate to become involved in the organization’s development effort. If pushed too far in the development directions, some can resign their board positions.

Third, the CEO needs to have a modicum of interpersonal and leadership skills to meet fund-raising challenges. In some development situations, success might only require introductions, while in other situations, it might require significant leadership skills and/or board financial support for the CEO to join outside professional or social groups.

Here is an example:

A nonprofit group identified a community need that fell within its mission and designed a program that would assist the specific population in need. The program was taken to the board, which agreed to move ahead with it, after substantial discussion. Several board directors were requested to assist the CEO in opening doors or in making calls. Some board members volunteered to make their own development calls, but in other situations, the CEO and a director made joint calls. As stated above. the CEO is in partnership with the board. The board chair and CEO need to clearly know those directors who have the interest and drive to become involved in development.

Here is a simple analogy in regard to fund-raising:

When it comes to raising funds, consider the CEO the forward scout looking for potential sources of funds. The board – the cavalry – is called to support that effort and broaden the base of support. In other words, the scout give the signal, but the cavalry is needed to take the objective.

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4 comments

  1. Hi Eugene

    Fundraising is a challenge for all non profits and it is becoming harder to identify the right places for potential funding.
    The CEO has to work in partnership with the board to achieve the best results. The Board should agree the organisations income strategy and how it will support their aims and objectives. This will give the CEO a framework to work within
    Everyone in the organisation should be actively looking for potential funding streams or for “doors that may need opening” the strategy should contain a protocol for identifying who will lead on the bid/approach and who will support the lead (sometimes the CEO, sometimes the Board Members and sometimes someboby else). The CEO has to manage all this activity and the potential impact/risks the funding bid may bring and ensure that the Board is kept informed and understands this.
    It is easy for organisations to fall foul of mission drift by just chasing any pot of money and attracting the wrong sort of funding can change the fundamental nature of the organisation

    Best wishes
    Mark

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  2. Mark: Thanks for your comments. Your comments about the protocol and mission drift are perceptive ones. Universities are particularly prone to take accepting real estate and other gifts which can become financial albatrosses and lead to mission drift. One business dean that I knew accepted a US navy plane as a gift for the university because his associate dean was a former navy pilot. Think of the maintenance cost on that gift!!

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  3. This is a side issue, but I would urge you to change the horrible militarist/colonialist analogy you give in your essay — that the CEO is the scout and the Board is the cavalry. This hearkens back to a legacy of conquest and genocide that is all too current both domestically and internationally.

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