Overcoming the Fear of Fundraising

It is the legal responsibility of every nonprofit Board of Directors to ensure that their organization has the resources to fulfill its mission - and that means fundraising. Yet those who recruit new members often fail to mention this for fear of scaring people away. And board members frequently become paralyzed when asked to do their part to raise money in the one manner that is the most efficient and cost-effective: asking donors directly for contributions.

Here are the most common fears people have - and some suggestions about how to address them:

• Fear of rejection: First of all, you're going to be turned down;on average 50% of good prospects will give - but note that this means on average 50% do contribute! Your job is to know that being turned down has nothing to do with you personally. When people choose not to give, they do so for many reasons - but it does not mean that you are a bad person or that they hate you.

• Fear of failure: It's important to change your definition of success in fundraising. Success is how many times you ask. And if you make all your asks, you get an A+.

• Fear of looking stupid: No donor will expect you to know everything. And when someone asks you a question you can't answer, say "That's a great question - thanks for asking! Let me talk with the Executive Director and get back to you." You can also approach the donor with a knowledgeable partner (staff or board).

• Fear of alienating friends: Have you ever lost or damaged a friendship because of a charitable request? If you make your asks with integrity (and without blindsiding your friends unexpectedly), they may or may not give, but they will not disinherit you. Give them an out: "If you choose not to participate, that's OK: we'll still be friends. But I sure hope you can help."

Fundraising is not about your feelings - it's about the donor. Just as you feel good when you make a charitable donation to a cause you care about, you are giving the donor an opportunity to feel good. It's not about begging or hounding people - rather it is about facilitating a fair exchange where donors give one thing of value (their money) in exchange for another thing of value (the good work of your organization). And it's not just about money - it's about building sustained relationships.

Your job is to reach out with integrity - speak with passion about your agency's mission, make a clear case, listen carefully, and invite the donor to become involved. There are strategies and techniques but they are far less important than the one quality you need to be successful: your passion for the mission.

So kick yourself and your fears out of the way and let the cause talk. Your job - and it is indeed an honorable one - is to get out there and raise the money your agency needs to do its good work.

Dollars and Sense

One of the most fundamental legal responsibilities of all board members is prudent fiscal management. This has become even more important due to a climate of increased scrutiny precipitated by numerous public scandals revolving around fiscal mismanagement by nonprofit Executive Directors, hand in hand with lack of board oversight. Yet more often than not, nonprofit boards fail to pay attention to their organizational dollars.

So: here are some guidelines about what you need to know:

• Do your board members receive, read, and understand the organization's fiscal reports? Boards should be looking at financial statements on a quarterly basis at minimum. If you find these statements confusing, know that you are not alone - accounting is a foreign language to most people. Your job is to make sure the information is presented such that everyone fully understands the numbers and their implications.

• Are your program costs aligned with your stated mission? It is the board's responsibility to ensure that your money is being spent on programs that directly further your mission.

• Does your nonprofit have cash-management policies in place? Every organization should have basic financial controls in place to maintain the integrity of its bookkeeping process. The bottom line here is to have checks and balances, with more than one person handling fiscal responsibilities, plus secure storage of cash/checks.

• Does your agency have a diversity of funding sources? Reliance on one single source of funds, whether an individual donor or a foundation, is dangerous. Ideally, you want a healthy mix of earned income, donor contributions, and grants.
  

• Does your agency have a program reserve? A designated reserve fund that covers 3-6 months of operating expenses in case of a dire emergency is an essential.

• Are you required to do audits? If your budget is $2 million or more, you are required by the IRS to have annual audits. If not, whether you do an audit is dependent on many factors including grant requirements, significant organizational change, and the size of your nonprofit.
  

• Does the board maintain proper oversight of wages and benefits? Be sure your board reviews all employee compensation and benefits annually in conjunction with performance reviews. The Northern California Wage and Benefit Survey, available at http:www.nonprofitcomp.com/index.html, is a great resource for comparative data. Note that all nonprofits are now required by the IRS to have a written policy on Executive Director compensation.
  

• Do you have the appropriate kind and amount of insurance? Every nonprofit should review insurance policies on a regular basis to ascertain whether the organization is properly covered.

The ongoing economic downturn has placed added stress on all nonprofits, and along with it, the need to truly understand your organization's financial situation as you make difficult decisions in regard to program and operating expenses. Don't be afraid to ask questions about your organization's budget and fiscal policies; in fact, it is your responsibility to do so.

Five Tools for Better Boards

Whether you are an Executive Director struggling with a combative Board of Directors, or a Board member secretly wondering why you made the commitment to monthly meetings that often waste your time, working effectively with a nonprofit board can be challenging.

When so many people know what a good board should look like, why are there still so many boards that are contentious and unproductive? Here are some reasons:

• Board members are volunteers with jobs and lives that take precedence over their nonprofit commitments.
• Dysfunction is frequently the norm when groups of people get together.
• On any given board, you are likely to have one person who is a flake, one person having a personal crisis, and one person convinced he/she is always right.
• Most board members haven't a clue about their actual legal and fiscal responsibilities.
  
• Despite all the written materials, there really is no one model for board structure and procedures - because every board is different.

Nonetheless, here are five tools that can help you oil the waters and facilitate a dynamic, creative, and cooperative working environment for your nonprofit board:

1. Focused recruitment: Expand your search beyond the standard categories of lawyer, banker, donor - consider geography, age, family circumstances, community connections, special skills, ability to work with others. Be absolutely honest about what the job entails when you talk to potential recruits.
2. Thorough orientation: Put together a complete orientation package that includes a detailed job description, fiscal and program information, annual calendar, policy manual, by-laws, and personnel policies. Meet individually with each new board member to review the materials, find out particular interests, and answer questions. Make sure every board member actually understands the organization's fiscal reports.
3. Creative culture: Aim for less reporting and more problem-solving. Tackle big issues first, before the minutiae. Evaluate your board agenda; change it if it's not working. Provide snacks and refreshments. Allow some time for fun - nothing improves a meeting more than a good laugh.
4. Clearly articulated procedures: Create a set of guidelines for board conduct that emphasizes civil discourse and consensus (and leave Robert's Rules of Order behind). Review and update your policy manual annually. Never schedule a meeting you don't really need. Always summarize, make work assignments, and designate the person who will nag everyone about deadlines before the meeting concludes.
5. Regular renewal: Once a year, read the organization's mission out loud and re-affirm your commitment to that mission; do the same for the board job description. Conduct an annual assessment of board strengths and weaknesses; create a work plan to follow up. Do an annual review of basic board roles and responsibilities.

Above all, stay open to change. Every board is different, and every year in the organizational life cycle is different. Budgets get bigger, staff turns over, the dynamics of the group shifts, client demographics change, and the balance of power between board and staff fluctuates. Be willing to see the change and make the adjustments that will further sustain your organization in accomplishing its mission.