Who Brings In The Money? Defining Governance Roles and Expanding Opportunities - Part I
Board fundraising doesn't emerge, fully formed, from the head of the gala committee. Fundraising is a process; it is built on good governance, clear vision, communication, and collaboration as Michael Hoffman, Chairman of Changing Our World succinctly discussed at the VCG Governance Matters Roundtable on April 19, 2012, hosted by Kate Waters at Morgan Stanley Smith Barney.
Hoffman's presentation emphasized the link between governance and fundraising. The panel discussion that followed, among two Board Chairs, their respective Executive Directors, and audience members fleshed out both Hoffman's point about Board governance and the nuances of collaboration.
Providing their insights into who does what with fundraising were Laurie Giddins, Chair, and Jeff Ginsburg, Executive Director, of East Harlem Tutorial Program , and Walter Booker, Sr., Chair, and William Goodloe, CEO of Sponsors for Educational Opportunity.
Part I: The Link between Fundraising & Governance
1. The nonprofit sector needs winnowing: Michael Hoffman believes that there are too many nonprofits; and that one-third of them should close down or merge. He believes only the good ones will survive. The issue is not whether an idea is good, but rather can the best ideas be executed and measured over the long term. To be one of the survivors, a nonprofit must:
- Articulate a good case, clearly stated, about its core strengths and the resources needed.
- Ensure there is good leadership in the boardroom and on staff, leaders who are willing to work hard, collaborate closely with staff (but not micromanage!), and know their roles.
- Identify prospects, from champion donors to those whose donations will grow over time, and find ways to engage them, from advisory boards to volunteer opportunities.
- Develop a clear plan about how the funds raised will be used and what staff needs in order to implement the plan.
His advice: Competition is fierce and one-third of nonprofits are in peril. Those who thrive will have to determine their strengths, and stay focused on them.
2. Philanthropists have changed. They are now "entrepreneurial philanthropists" who want to be deeply involved and, sometimes, view disruption as the road to success.
They also want to scale organizations and to make them sustainable -- a more businesslike view of the nonprofit sector. These new philanthropists are "quants," i.e, people who like to see the numbers. They want nonprofits to:
- Show the impact of their efforts -- measurements, analytics, metrics.
- Be transparent.
- Succeed -- failure isn't an option -- so they are more likely to collaborate.
- Focus on a cause that really matters to the donor.
These funders are thinking more like for-profit businesses. They want to know that your program is rigorous, carefully calibrated and successful. What matters is what performs over the long term. Philanthropists who cut their teeth on Wall Street are particularly demanding; you have to be excellent.
Take-away: To attract the new breed of philanthropists, you've got to prove that what your organization does provides value and has an impact.
3. Family philanthropy is on the rise. In fact, 70% of family foundations involve children under the age of 21 and 72% see philanthropy as a family legacy, but unlike previous generations, only one-third are interested in "naming" opportunities (i.e. putting the family name on a building). Take note also: Women control $20 trillion, 43% of the top wealth holders are women, and 9% of the world's billionaires are women.
Take-away: Are you sending out the right message to the right audience?
4. Digital philanthropy has arrived. Approximately 40% of adults use social networking every day. Online giving is growing rapidly but even more phenomenal is the growth of mobile access: Ericsson, the mobile phone company, predicts that within 5 years, 98% of the world's population will have access to a mobile phone. The children of these philanthropists do not have business cards; they text or use an app.
Take-away: The donors that will support you in the future are not just online, they're mobile. Where are you?
Please click here for Part II.