I was recently asked by a reader of this column whether I would write about working with boards of directors of Jewish nonprofit organizations. It struck me that this individual differentiated between boards of “Jewish” and “non-Jewish” organizations. In my view, there is no difference, especially if the roles and responsibilities of board members are clearly delineated. Any board should follow the same principles.
The underlying implication raised about “Jewish” nonprofit boards really is the “under the surface” meaning. Many folks are concerned that these boards are tougher and more challenging to work with than other boards. Having seen other boards in action, it is not the ethnicity or religion that dictates its toughness. Instead, it is its steadfast resolve to succeed by following generally accepted best practices.
Over the years, I have worked with both large and small boards. Size is not a determinant of effectiveness. What remains critical is whether boards unambiguously understand their roles and responsibilities. In order to better understand what this means, let’s consider history.
The crucial role of a nonprofit board has increased over time. In 1940, there were only 12,500 charities registered with the IRS. Today, there are an estimated 2.3 million nonprofit organizations operating in the U.S., with approximately 1.6 million registered with the IRS. Since 2000, we have seen a nearly 30 percent increase in such entities.
With the explosion of nonprofits, a board’s central role regarding finances, accountability, compliance and transparency has evolved. As a result, over time, more entities are vigilantly watching nonprofits. These include various state legislatures, the IRS, watchdog organizations such as Charity Navigator, Guidestar and the Better Business Bureau Wise Giving Alliance, the news media, other federal agencies and the public at large, including donors. It became evident that boards needed to be focused on three key areas of responsibility: (1) governance, (2) advocacy and (3) philanthropy.
Board members are the fiduciaries of the nonprofit and govern by steering the organization towards a sustainable future by adopting sound, ethical and legal governance and financial management policies, as well as by making sure the nonprofit has adequate resources to advance its mission.
Board members are uniquely positioned to be successful advocates and ambassadors for their missions. As business leaders, community volunteers, philanthropists and opinion leaders, they have the connections, the confidence and the respect needed to speak up on behalf of their organizations when policy decisions are made that might affect the organization’s ability to achieve its mission.
When it comes to philanthropy, nonprofit boards have two indispensable requirements: “To give and to get.” This fundraising responsibility is often the most challenging facing boards. So, the question often asked is “Why?” The answer is simple: By giving, and giving generously, it ensures that each board member has “skin in the game.” Personal giving also sets the stage for engaged fundraising by board members.
Experience and research have shown that personal giving by board members works in at least three ways: (1) It is a public declaration that the board member has invested in the charity, (2) It indicates that board members have a commitment to the organization and its mission and (3) It encourages other donors to give and impresses institutions that provide grants or other support. In fact, many major donors and foundations will not support a charity unless the board achieves 100 percent giving.
The focus of our monthly columns is fundraising. In 2015, nearly $375 billion was raised by nonprofit organizations in this country. These funds came about primarily from individual donors and major gifts, foundation giving, charitable bequests and corporate giving. It is undeniable that boards of directors played a vital role in raising these funds.
About 15 years ago, I participated in a seminar entitled “Building a Fundraising Board.” One of the presenters described 12 types of boards. Space limits my ability to describe these now, but we will next month. Nonetheless, it is irrefutable that if the roles and responsibilities of the board are explicitly defined, then the nonprofit—Jewish or non-Jewish—will be far ahead of the game.
Is your board ready to undertake its mission?
By Norman B. Gildin, President, Strategic Fundraising Group
Norman B. Gildin has fundraised for nonprofits for more than three decades and has raised upwards of $92 million in the process. He is the president of Strategic Fundraising Group whose singular mission is to assist nonprofits raise critical funds for their organization. He can be reached at [email protected].