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'Skin in the Game' and the Importance of Board Giving

June 19, 2018

Skin_in_the_gameWhen we engage with new clients, we always begin with the imperative — up front and with clarity — that in order for a campaign or fundraising project to be successful, 100 percent board participation is required. Board members, as the legal stewards of an organization, must lead by example. And the impact of their participation goes well beyond the individual gifts themselves.

Nonprofit organizations rely on their boards for many things: governance and budgeting, guidance, community involvement and, of course, fundraising. Though some boards downplay the fundraising aspect, we believe it's essential that each board member be an active participant in ensuring the financial health of the organization on whose board they serve. The boards that waffle on this target by not articulating a clear expectation upfront are the ones that most often fall short of their fundraising and leadership goals. In fact, the majority of successful organizations report high board giving rates, while studies have found that board giving is more positively correlated with overall fundraising success than any other single factor.

Many boards have mandatory giving policies. According to a recent BoardSource survey, 68 percent of nonprofit organizations have a policy requiring board members to make a personal contribution on an annual basis. Some boards have a "give or get" policy that allows board members to either give a personal gift or to raise funds from family and friends equal to the amount of the required gift. We prefer a "give and get" approach, obligating a board member to lead with a personal investment and inspiring others by saying "join me," rather than outsourcing that responsibility to others.

Not every board has a policy that requires board giving. For those that do, the process is straightforward and requires a simple call to remind board members of their obligation. The process of new board member recruitment and orientation should include an early and candid conversation about fundraising expectations and financial obligations. Board leadership must set a good example by giving first and publicly announcing their gift as a way to encourage others.

Of course, board members may feel unmotivated to give, for any number of reasons. They might not understand why their contribution is necessary. Compared to major gifts, annual gifts from individual board members might seem inconsequential. If board giving is not a precondition of board membership, some board members may feel uncomfortable broaching the topic and will avoid asking because they feel embarrassed; they don't want to feel like they're pressuring their fellow board members, or stretching them beyond what they are able to do. Others may feel that contributing their time is sufficient and a gift isn't necessary. (While time is valuable, the giving of actual dollars by board members is important to the financial health of nonprofits and creates a culture of giving that may not develop otherwise.) 

The most common reason for individuals not giving is that they simply haven't been asked. It's the responsibility of board leadership to make sure to personally ask each board member for a gift. A personal ask will yield a greater return than a direct mail or email request based on the hope that "they will get it." And within that personal conversation, the individual making the ask should articulate the organization's needs and mission and clearly explain both the organization's financial challenges and opportunities, as well as the practical (and inspirational) function of that particular board member’s gift.

Why 100 percent: Boards are responsible for the financial health of the organization. But BoardSource reports that only half of nonprofits (49 percent) reach the magic number of 100 percent board member participation.

Board giving typically accounts for 10 percent of an organization's total giving. The actual dollar amount of a gift is not as nearly as significant as the act of making a gift, however. Through personal philanthropy, each member publicly recognizes and commits to the organization. (Board members who use a community chest like the United Way or a Jewish federation to make their gift should designate their own organization as one of the recipients of their funds.) One hundred percent participation indicates that each board member has a strong commitment to the organization and its mission. And the message it sends to the broader donor community is compelling and a critical motivator for others.

Making board giving mandatory — an expectation of board membership — has a direct impact on the degree to which others are willing to support an organization. Appeals to donors are strengthened and are more convincing if the organization's board members lead by example and do so annually. At the same time, many foundations will only award grants to organizations whose board members all support the organization. Being able to show that your board is fully invested in the success of your organization will open doors to others who also are willing and able to support you.

Encourage 100 percent participation: Though the easiest way to accomplish this goal is to make board giving mandatory, it's not always possible to change an organization's by-laws or the existing requirements of board membership. The goal, therefore, should be to create a culture of giving, deepening the relationship between the organization and its stakeholders in such a way that each and every one of them not only expects to give but does so out of a sense of personal commitment (rather than obligation) to the organization.

Needless to say, engagement is a key component of participation. Survey after survey demonstrates that board members give more to organizations that offer a substantive, meaningful board experience. The more engaged board members feel in their role as a member of the board, the more likely they are to support the organization financially. 

Finding ways to engage board members should be a priority for both board and senior leadership. It can be as simple as giving every board member a fundraising-related task such as making phone calls or writing thank-you notes. The point is, by connecting board members to the fundraising process — "giving and getting" — they will gain a deeper understanding of the importance and impact of their own gift. And once a culture of giving is established and becomes a priority for the organization, the subject of personal giving by board members will become a more straightforward expectation.

Engaged boards members also will be more likely to connect the organization to their networks by making personal introductions, allowing their names to be used in solicitations, and asking associates, friends, and families for gifts. Board participation has a deep impact on fundraising. When board members are asked to solicit friends, business associates, or others in their various networks for financial contributions, those organizations met their fundraising goals more frequently than organizations that did not ask board members to do so. And the foundation for that success is in having each board member financially contribute to the organization on an annual basis.

Board member giving is a public commitment to an organization's work. Most nonprofits list their board members on their website and in their annual reports. Board members who take pride in the public recognition should make a personal gift part of their investment. As the hit Broadway musical Hamilton puts it, "When you got skin in the game, you stay in the game." Boards that require board members to have skin in the game end up being stronger boards governing more financially sound organizations with deeper donor pools willing to support and grow the organization.

Avrum Lapin is president at The Lapin Group, a full-service fundraising and management consulting firm for nonprofits based in Jenkintown, Pennsylvania. A board member of the Giving Institute and a member of the editorial review board of Giving USA, Lapin is a frequent contributor to eJewishphilanthropy.com and a speaker in the U.S. and Israel on the opportunities and challenges in today’s nonprofit marketplace. This post originally appeared on The Lapin Group website and is reprinted here with permission.

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