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Nonprofit boards and funding

By Ken Behr

One of the big opportunities nonprofits have is to carefully understand the best roles and responsibilities of their board. Whether a board of elders in a church, a board of directors or a board of trustees, organizational needs for the right type of board members change over time. Understanding when it is time for the board to be involved in fund raising is key to expanding mission and ministry

Role of the CEO is key

When does the board become fully engaged in fund raising? That question is best answered by looking at the position of the chief executive officer. This title is arbitrary and some organizations may call this key leader the president, the general manager or director, or in the church world a senior pastor. However, the actual functions of management that the CEO is charged with fulfilling tell us much about their role as well as the role of the board.

The traditional functions of management are planning, organizing, directing and controlling, and if the CEO is charged and fully responsible for these classical functions, then likely we have a true CEO and the board can take on other responsibilities. Also, as the organization “matures,” there are more opportunities for the board to take on more strategic roles regarding fund raising.

The three phases of board maturity

I’ve discovered that all boards are not created equal, nor should they be. While all board have the fiduciary responsibilities of governance, few if any need to spend all of their time on governance. Annual executive compensation reviews, budgets and a financial audit take only a portion of the time, leaving the board with other opportunities rather than responsibilities.

When a nonprofit is in its Developmental Stage, typically in the first few years and with revenues of less than $100,000, the members of the board of directors are likely the key volunteers. They are idea people and dream with the founder about future possibilities. Their selection and appointment to board status is simple, often not even formalized and usually happens through friendship rather than any strategic plan.

In the Growth Stage, typically in the second through fifth year of the organization and when revenues are still less than $500,000 to $1 million annually, the board of director’s role begins to change. Rather than volunteers, these board members are key partners in the ministry.  CEOs look for skilled people to fill these roles that provide expertise and service that otherwise would need to be purchased or gone without.  Attorneys, tradespeople, skilled technology people are great finds for these boards and they help out with services provided in-kind. Governance becomes more important but board members are strategically selected for what they can bring to this growth stage of the enterprise.

The ultimate stage is the Expansion Stage, and the organization is likely more than five years old with revenues in excess of $1,000,000 annually. While less than 30 percent of all nonprofits ever get this large, there are still much more ministry that can be accomplished but the thing that is lacking is money. The board of directors’ emphasis should be shifted to that of fund raising, and board members are selected based on their networks of friends and associates. These are connected people rather than skilled people (i.e. Growth Stage).  They are ambassadors of the mission and ministry. They are the best people to be involved in growing the funding base.

Here are just a few ways for these board members to get involved in the effort.

  • Network!  Network is not fund raising, it’s just natural
  • Host a table!  Always have a list of upcoming opportunities and invitations ready
  • Coordinate a grant writing initiative (city, county, state, federal, philanthropic)
  • Strategically create a list of top influencers to meet
  • Plan an event at your club/home/work
  • Host a lunch each week with a new prospect
  • Email, call or visit with donors just to say thanks
  • Tell people why they serve as a board member
  • Identify and recruit an in-kind service

Board members that understand the opportunity to be involved as an ambassador build a stronger and more stable funding base. They have the opportunity to be a key part of the growth and success of the organization. They build a lasting legacy and transform hearts.

Ken Behr is an executive pastor at Christ Fellowship, Palm Beach Gardens, FL. www.gochristfellowship.com

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1 Comment for “Nonprofit boards and funding”

  1. Mike Klockenbrink

    Good solid information Ken, nice job.

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