[By Richard Male, Regis Nonprofit Affiliate Faculty member] This past Monday, November 28, the Wall Street Journal published an excellent six-page pullout of articles related to the state of American philanthropy.
From provocative opinion pieces about whether charities should “operate more like businesses” to a checklist for prospective board members to changing trends on how charities solicit donations, this section is a real keeper and highly recommended.
We had to smile at the obvious nature of a few of the observations (“nonprofits need to engage their boards,” and “relationships are the heart and soul of fundraising”), although there is much in this collection of articles to consider.
Here are a few highlights:
1. Diversity among funders in the philanthropic community is vital. An ecosystem of different funding styles gives everyone a fair chance of seeing their ideas and interests supported.
2. Without necessary investments in overhead, there is no doubt that an organization will underperform. It can’t meet expectations, it may be difficult to retain high-quality talent, it may not have the systems to report that information donors request.
3. Nonprofits should be clear about their definition of success, articulate their strategy for achieving success and be up front about what that costs. This is especially true in willingly articulating the need for certain overhead expenses (i.e., a better IT system to increase effectiveness).
4. Similarly, organizations need to be honest with donors about that it takes to get the job done, why the expenditure is required, and be obsessed with transparency in where the dollars are going.
5. It takes total commitment to be a good board member. Increasingly, board members are expected to do everything from writing letters and calling donors to visiting and assessing programs the charity runs. Board member support of development work has become increasingly essential as government funding shrinks.
6. It is essential to have a conversation about what the charity expects board members to give. Board members have to be comfortable raising money, whether it means handing over all your contacts, personally calling or writing letters for end-of-year requests, or serving as chairman of a gala.
7. It is every board member’s responsibility to read and understand financial statements. Nonprofit board service is a very real legal and fiduciary responsibility that has, rightfully, become a sharper focus.
8. The economic climate has fostered trend toward more donor-advised funds and wealthy individuals donating “alternative” assets (real estate, art, collectibles, life insurance, etc.) while holding on to their liquid securities.
9. An organization that teaches a donor about an issue has a much better chance of success than one that just “pitches” a donor about the organization’s cause. The organization should also clearly explain what it does and how it relates to the mission in order to avoid confusion.
10. An estimated 86% of board members today are over the age of 40, and many serve on more than one board.
Enjoy the entire Journal Report here.
Reprinted with permission from Richard Male and Associates, www.richardmale.com, 303-355-2919.
Richard Male is an Affiliate Faculty member of the Global Leadership in Nonprofit program at Regis University with over 30 years of experience in the nonprofit sector as a leader and teacher. He founded Richard Male Associates in 2001 to work with nonprofits throughout the United States and internationally, helping small to mid-sized organizations with organizational development, leadership and management issues, fundraising and financial management and public policy opportunities.