Pressure Test Your Nonprofit’s Fund Development Efforts
Pressure Test Your Nonprofit’s Fund Development Efforts
By: Eugene Fram
It’s no secret that nonprofits do not excel in the craft of fundraising. A 2015 study reported that 65% ofCEOs gave their boards academic grades of “C” or below for efficacy on this front. Yet most will agree that without the continuous influx of financial support, the mission to which the board members have committed themselves will fail
I clearly remember examples of this deficit from my own board experience—one in which I served on the fund development committee for a small nonprofit which met monthly for about a year. A sincere and hardworking board chair headed it, but the meetings took place without the presence of the CEO. Many ideas with merit were exchanged such as developing a reserve fund, “get or give” board requirements etc.There was a lot of talk but no implementation, and after a year of pure discussion, a new president, who convened a new committee, disbanded the group.
A review of the pressure points in key fundraising activities would have taken the group from talk to action and further implementation. Here are activities and their variations that I consider most critical to nonprofit development processes:
Board-CEO Partnership—Some Elements For Success
To be successful in fundraising, both the board and CEO must be active partners. Board memberscannot fundraise alone as in the above example.
Board members will never have the required depth of organizational knowledge to demonstrate nonprofit outcomes and impacts. Also the CEO and/or development director, if there is one, will be needed to build proposals for grants or awards. In addition, the CEO should have access to foundations in the mission field, so that appropriate responses can be initiated
. Although this is not always the case, the CEO needs to have the ability to interact with senior business and foundation executives. Where the CEO lacks these capabilities, the board has an obligation to offer the services of a management coach to help him/h to acquire such skills. Expenses involved can yield substantial returns!
Hypothetically, the board must be continually seeking donors who will be interested in the nonprofit’s mission, quickly involving the CEO when an opportunity is identified. Similarly, the CEO has an obligation to agree with the board about what funding proposals should be pursued from foundations and individuals.
While the board is one partner in the development effort, not all board members should berequired to be active in fundraising. At a minimum, all should be asked to report donor opportunities that they encounder.
For nonprofits that have a diverse board, some training on how to seek and address opportunities will be necessary. These topics can range from knowing that their employers have a matching gift policy to recognizing something they see in a newspaper/magazine that might be reviewed as a funding opportunity.
Three or four board members, willing and able to drive the effort, should shoulder major funding activity. Many of the others will be unable or unwilling to become involved, except to provide lead information. (A recent study shows although 90% of nonprofit directors believe fundraising is an important obligation, only 45% of organizations require board member to minimially fundraise.) *
The board members focusing on development need to be able to be persistent and constantly on the lookout for new sources. As one fundraiser said to me, “ I’ll keep after the opportunity until the donor tells me to “go away!” He was directly responsible for a $1 million donation to his university for organizational support. As part of the partnership, the board and CEO will have to determine how much time and resources need to be given to fund development. This can become a difficult discussion because many CEOs will want to direct more of the budget to targeted mission projects. In some cases where an unusual opportunity arises, the CEO may have to expend substantial amounts of his/h personal time to be successful. He/she may also have to redirect staff time and resources to the project.*
Nonprofit fundraising is a team effort. In cases where the CEO does not actively involve some board members in the process, make certain the board is not being micromanaged by the CEO.
Nonprofit Management 
I enjoyed reading this article and agree with its central premise that fundraising is ultimately a shared responsibility between the board and the CEO. My own experience, however, has led me to place the discussion in a broader governance context.
Having hired three nonprofit CEOs, I have come to believe that the defining competency of a nonprofit CEO is the ability to secure the resources necessary to fulfill the mission. Leadership is, of course, essential. However, in the nonprofit sector, leadership without the ability to generate sustainable financial support ultimately places the institution at risk. For me, fundraising is not separate from leadership. It is one of its highest expressions. A nonprofit CEO must inspire confidence among donors, foundations, corporations, volunteers, and other stakeholders in much the same way that a for profit CEO inspires confidence among customers, employees, investors, and lenders.
From the board’s perspective, I believe its primary responsibilities are to preserve the mission, establish long term strategic direction, ensure financial sustainability, and select, develop, evaluate, and, when necessary, replace the CEO. Fundraising is an important part of that responsibility, but it is not equally distributed across every board member. High performing boards recognize that directors contribute different competencies. Some excel at governance, some at finance, some at strategy, some at legal matters, and others at opening doors and cultivating major donors. Every director should contribute to the institution’s financial sustainability, but not every director will be an effective frontline fundraiser.
One principle I have increasingly embraced is that the Board Chair’s most important leadership responsibility is not simply conducting meetings. It is developing, maintaining, and sustaining the board’s collective competencies in partnership with the CEO. Great institutions are governed by boards that intentionally recruit complementary skills, develop directors over time, evaluate their own effectiveness, and continually strengthen their ability to govern.
This aligns with what I describe as the principles of institutional stewardship. The purpose of governance is not simply to oversee today’s operations, but to leave the institution stronger than it was inherited. Every significant decision should strengthen one or more forms of institutional capacity, including financial capacity, leadership capacity, governance capacity, organizational capability, culture, reputation, and succession readiness.
Ultimately, fundraising is not the end goal. It is one of the critical means by which an enduring institution advances its mission for generations. The real measure of both the CEO and the board is whether they leave behind an institution that is stronger, more resilient, and better positioned to serve those who depend on it long after their own service has ended. Don Dea
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