Charity Leaders Say Fund Raising Is Non-Profit Board Members’ Chief Weakness

Inability to raise money is the major weakness of many charities’ boards of directors, a new survey has found.

More than a quarter of 1,200 non-profit groups responding to a survey by the National Center for Nonprofit Boards listed fund raising as their boards’ most significant weakness, while only 5 per cent listed fund raising as a board strength.

In addition, only 60 per cent of board members made a personal contribution to their organizations last year. That figure is a concern to fund raisers, because many try to get donations from all board members before approaching donors from outside their organizations, said Nancy Axelrod, the center’s president.

She said she was also concerned that 20 per cent of the non-profit groups cited lack of involvement and commitment as their boards’ major weakness. It is a well-established fund-raising dictum that board members must be involved and deeply committed to an organization before they can give and ask for major gifts, said Ms. Axelrod.

“We are seeing widespread frustration about how effective boards are in the fund-raising process, and how effectively board and staff work together in this important effort,” said Ms. Axelrod. “There is also continuing concern that some board members aren’t as effective and involved as others.

“The question is why? Is it because a person isn’t willing? Or are they not receiving the orientation and continuing education they need to understand their responsibilities?”

The center’s survey was based on responses from the chief executives of nearly 1,200 non-profit groups that are collectively governed by 23,000 board members. Responses came from a broad cross section of local, regional, and national non-profit groups with incomes of more than $100,000 a year.

Many non-profit groups had established policies designed to improve the fund-raising performance of their boards, the survey found.

Almost a third of non-profit groups required board members to make annual personal donations. Of those, 40 per cent suggested minimum annual donations for board members, the survey found. The average minimum donation requested was $150 last year, the report said.

Those policies varied among types of organizations. Nearly 60 per cent of arts and cultural groups required board members to make annual contributions, compared with 32 per cent of human-services groups, 27 per cent of educational institutions, and 23 per cent of health organizations.

Many Donations at Arts Groups

Arts and cultural groups also received the greatest number of donations from board members, the survey found. Those groups reported that 80 per cent of their trustees made donations last year, compared with 63 per cent for human-services groups, 58 per cent for health organizations, and 57 per cent for educational institutions.

Among other key findings of the survey:

• Only 1.1 per cent of respondents paid their board members a fee or honorarium for their services. Nearly a quarter reimbursed board members for their expenses in attending meetings.
• Nearly half-46 per cent-of non-profit board members were women. That contrasts sharply with corporate boards, where only 6 per cent are women, according to a survey by the National Association of Corporate Directors.
• Over 85 per cent of non-profit board members were white, compared with 92.7 per cent of corporate board members, according to the corporate directors’ survey.
• The average board had 17 members; board size rose along with a non-profit group’s income.
• Over 60 per cent of the non-profit groups had written conflict-of-interest policies for board members.

Ms. Axelrod said the center was preparing to study such conflict-of-interest policies next year. “We are receiving a large volume of requests on how to establish of conflict-of-interest policies,” she said. “Just having a policy isn’t necessarily enough. You also need procedures to enable board members to disclose conflicts and prevent them.”

A report on the survey, “A Snapshot of America’s Nonprofit Boards: Results of a National Survey” will be available next month. Copies cost $14 each and can be obtained from the National Center for Nonprofit, Suite 510, 2000 L Street, N.W., Washington 20036-4907; (202) 452-6262.