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Creating Structures that Work
Presented by: Kim Klein
[email protected] Kim Klein is the founder of the Grassroots Fundraising
Journal and the author of Fundraising for Social Change (now in its fifth edition.) Her latest book, Reliable Fundraising in Unreliable Times discusses how to survive and even thrive in the current economy.
Kim is a member of the Building Movement Project an leads workshops on the need for fair and just tax policy.
Why is a board a logical way to govern a nonprofit?
Follow the money:
Brief Summary of Board Responsibility
If you have 501(c)3 tax status, your organization:
• Can offer tax deductibility for donations
• Can apply for funding that is not available to businesses and individuals
• Can send your bulk mailings for nonprofit rates
Advantages of 501(c)3 status
Your organization does not have to: Pay property tax on property you own that
is used for a tax exempt purpose Pay income tax on income carried over
from one tax year to the next (In some states) pay sales tax
Tax Exemption and Boards
A 501(c)3 is given a number of tax exemptions and is allowed to offer tax relief to donors.
The IRS has to make sure that these advantages are not misused.
Who can be in charge of that for each of the 1.5 million nonprofits that operate in the USA today?
Fiduciary Responsibility Has to be at least three people These people cannot have a financial
incentive to make any decision These people have to operate at
arms length from the organization These people make sure that the
public is actually served by this “public” charity
These people are called “The Board of Directors.”
The Problem with Boards
Compare: 1950’s: Running an organization cost a lot
less Thousands of people, mostly women,
could afford to be full time volunteers Many families could manage with
one wage earner
The Problem With Boards
Compare: 1950’s 2008# of nonprofits : 30,000 1,500,000
# of people neededto serve on a board@ 9 per board: 270,000 13,500,000
What Board members think
When asked, “what is your biggest complaint about your organization?”
Board members said: “All the staff want from me is my money and
my friend’s money.” “The ED basically starts every meeting with
‘what have you done for me recently?’” “The only reports that are important to the staff
are what we have done with fundraising.” “The only way to be taken seriously is to act
really badly.”
Why the board?
FIDUCIARY RESPONSIBILITY:
Boards are “stewards” of mission
Return to Basics
If the board is to help raise money, they must understand some basic
principles of fundraising.
Private Sector Giving: 2008
Total Amount Given: $307.5 BillionIndividuals $229 Billion (75%)Bequests $23 Billion (7%)Foundations $41 Billion (13%)Corporations $14.5 Billion (5%)
This is a 2% decline over 2007, 5% when adjusted for inflation. There was virtually no decline in individual giving.
Source: Giving USA
Most People Give Away Money
In every country where fundraising and philanthropy have been studied, most people give away money.
USA 7 out of 10 adults, Canada 8 out of 10, Brazil, 7 out of 10, Holland 9 out of 10, etc.
People are going to give away their
money. They will give it to your organization or another one.
People Give When They are Asked And they don’t give when they are not
asked.
Donors are more likely to remember how they were asked than the name of the organization or the cause to which they donated.
Most Money Comes from People
Most donations and half of all money comes from families with incomes of $90,000 or less.
This is most people.
Every Board Member Should be Able To:
1. State a one sentence, easy to remember mission or vision statement
2. Name three important accomplishments from the previous year
3. Name three goals for the current year
4. Know the total budget and some budget detail
5. Talk about how the organization raises $.
How well is your board doing?
Fundamental Rules for Boards
Board members must:1. Test the proposition that the
organization is worth supporting by asking themselves, “Would I give?”
And answering a resounding “YES!”2. Board members must then take that
proposition out into the community and ask “Would you give?”
Getting the Board on Board: the Modern Way
Some Possibilities: 1) Eliminate a standing fundraising
committee2) Make everything ad hoc and organize
everything as a short term campaign3) Find ways for every board member to
participate4) Let the reward for work well done be the
end of work for the time being
A Champion
Someone on the board takes on the task of keeping everyone’s enthusiasm up:
• Talking to board members privately• Heaping praise and appreciation on
those who do their work• Ensuring that no one does too much
or too little• Keep people focused on mission
Reward Good Behavior
All work is time limited: as little as a few hours to as much as eight weeks. Everything has a beginning date, a goal and an end date.
The reward for doing your work is a break.
Identify the problem before solving it
Perhaps the problem is: The organization is funder drivenThe executive director does not wish
to share powerThe organization is conflict averseThe board has several nay-sayersSome board members prefer to do
all the work
A New Structure Solves structural problems
Such as: Lack of clarity about roles No clear decision making process Little or no accountability Inadequate succession planning High turnover Little or no turnover
Alternative Forms
Shared leadership model: People carry the weight of leadership more evenly: Rotating ChairFew or no standing committeesSerious and documented planning and training
for succession
Works Best When: Staff use this model also and the organization is
committed to leadership development.
Alternative Forms
“Chaordic” Model (Wheatley, Senge) No firm structureStructure designed to play to strengths of
current members and staffChanges as the players changeChange becomes more deliberate over
timeRequires: reading, reflection, discussion
AccountabilityRequires: Honesty (wrapped in kindness)Praise for work well doneCommitments clearly understood by all partiesSanctions for work not doneRecognizing that many good people are not suited to
being Board members and no good board member is always a good board member
Foundation for Success
What’s Next?
What do I/we need to: Think about?Experiment with? Read or study?Talk with others?What is most exciting?What is most scary?
Helpful Resources from Kim KleinMagazine and e-newsletterGrassroots Fundraising Journalwww.grassrootsfundraising.orgBooks by Kim KleinReliable Fundraising in Unreliable TimesFundraising for Social Change Other recommended books: Working Across Generations by Robby Rodriquez,
Frances Kunreuther and Helen KimAccidental Fundraiser by Stephanie Roth and Mimi
HoOrder from www.josseybass.com or your local bookstore