In most cases, nonprofit board members devote a lot of time and energy to the nonprofit boards on which they serve. So is this service enough? Do they need to contribute financially as well? In one word, YES!
The general rule of thumb is that board members need to contribute to the organization by giving of their time, talent and treasures. Quite often, board members will say, “well, I give lots of time, so I don’t need to give any money.” However, this is simply not the case. It has been said that you can tell what is important to someone by looking at their checkbook (or online bank statement) and seeing exactly what they spend their money on. This same principle applies when it comes to giving to nonprofits. When an individual becomes a board member, he/she needs to understand that it is important to demonstrate their commitment to the organization by giving financially.
This is often a difficult subject to broach with board members because many of us are simply uncomfortable talking about money. However, this issue is becoming a capacity and sustainability issue for nonprofits. In the last couple of months, I have spoken with no less than five people whose organizations have not received a grant for which they applied because 100% of the board does not contribute financially. Foundations have an expectation that 100% of board members are contributing financially to the organization. If you think about it, this makes sense. It is very difficult to ask someone else to give to an organization if you have not given yourself.
The reasoning of the funder is, “if those closest to the work of the organization (i.e., board members) are not willing to give to the work of the organization, then why should we?”
The next logical question, then, is how much do board members need to give? This question is much more difficult to answer than the previous one. The best answer to this question is that all board members need to contribute at a level that is meaningful significant for them. I like this response because it takes into account that nonprofits may have people from all walks of life on their boards including constituents of services as well as professionals; clearly, board members could have very different income levels and thus, very different abilities to give. The important thing is that they are giving.
While many organizations do not like to discuss the issue of board giving, especially prior to having a board member join the board, in the interest of transparency and honesty, it is an issue that must be discussed. One way to do this is by having all board members sign a board commitment letter which outlines all of the expectations the organization has of each board member. The commitment letter needs to be signed on an annual basis by all board members.
The recommended best practice is that board members will give of their time, talent and treasure. Time is given through their volunteer service, talent is their special gifts, skills, etc., and treasure is their money and wealth. Board members need to give all three to the organization.
Board giving is a difficult subject but one that will help your organization move forward as a stronger, more effective organization. We can help you develop a board commitment letter for your board, contact us today to get started.