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A Note from BauerGriffith

We are living in difficult times – the coronavirus pandemic, wildfires, global warming, racism, and a lot of rancor, political and otherwise. This year, 2020, can’t be over soon enough. Please know that what is important to you is important to us. We are here for you.

Stacy and Nancy

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A Guide to Standing Committees for Nonprofits — The Development Committee

I may be biased, since I’ve been both a professional and volunteer fundraiser at various points in my career, but I think the Development or Fundraising Committee is, next to the Governance Committee, the most important standing committee of a nonprofit board. After all, if nobody is raising money, none of the other committees have anything to do! But while this committee is vitally important to the financial sustainability of your organization, it can also be the most challenging committee to manage and implement.

In developing a strategy to mobilize an effective Development Committee, I suggest we start with two premises or principals. The first premise is that fundraising is the responsibility of the whole board; every member, without exception, should play some role in raising funds for your organization. The second premise is that the primary responsibility of the Development Committee is to create and foster a culture within your organization that allows your full board to feel empowered, confident, and (dare I say) comfortable with their role in the fundraising process.

To me, this means the Development Committee is not created to be the small group of board members who do all of the asking during your various campaigns and initiatives. At the end of the day, they may be those people, but that shouldn’t be the primary reason people are asked to sit on the Development Committee. A structure like this will likely give the impression that the rest of the board isn’t needed in the fundraising process. Rather, consider these primary areas for your Development Committee to assist staff:

  • Create a development plan that is reflective of the goals and needs of your the organization
  • Communicate and cultivate buy in for the organization’s case for support among the full board
  • Create tools and resources for the board to use in their own individual fundraising efforts
  • Allow each board member to identify the specific tasks and roles they will play in the fundraising process
  • Create a sense of accountability for achieving those tasks and roles

Consider this sample description of the Development Committee:

Development Committee

The Development Committee shall: (a) review, approve, and support goals and strategies for, and oversee the progress of, the Corporation’s fundraising initiatives, including the Annual Fund, major and planned gifts, capital, endowment, and comprehensive campaigns, and events, in consultation with the Finance Committee; (b) support and assist the Development Office in its efforts to engage members, donors and supporters in the activities of the Corporation, and to cultivate, solicit, and steward donors; and (c) work with the Governance Committee to ensure that new Directors understand and accept their responsibilities in fundraising and development.

Some things to note:

  • I encourage you to state specifically the relationship between the Development Committee and the Governance Committee, to ensure fundraising is part of the recruitment, training, and board evaluation process.
  • I also encourage you to state specifically the relationship between the Development Committee and the Finance Committee, so that the contributed revenue goals in your budget are well thought out, well supported numbers informed by the needs of the organization and the donor resources available.
  • Remember that solicitation is only one relatively small part of the donor cycle. Encouraging and empowering board members to cultivate and steward donors can increase board involvement in fundraising and open the door to more good opportunities for staff to solicit.

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Policies are great — but you need procedures, too

I have the privilege of working with many nonprofits to create or update their gift acceptance policies. This policy is the set of guidelines adopted by your board and/or senior leadership, that balances the need for fundraising with the risk the organization is willing to take in accepting various types of gifts.

For example, taking cash is a no brainer. It’s fairly easy to know when the gift leaves the donor’s hands and gets to the nonprofit, there’s no question about what it’s worth, and the nonprofit can use it right away without any additional steps.

I’ve always put publicly traded stock in the same category as cash, but I recently had two colleagues tell me how they’d never want their nonprofit to accept stock as a gift. I was stunned, so wanted to hear their stories.

One colleague told of the donor who asked for the nonprofit’s bank account information to make a stock transfer through the automated system. The nonprofit gave the donor their regular checking account information, though (they didn’t have a brokerage account), and the transfer never went through. No one caught it until much later, when the value of the stock had decreased, making the donor’s gift much smaller.

Another colleague told me of the donor who handed him stock certificates as a gift. He took them to the bank and couldn’t deposit them in the nonprofit’s account because additional documentation was required from the donor. My friend ended up making multiple trips back to the donor to complete the documentation, all the while worrying about keeping those valuable stock certificates safe.

Both of these stories illustrate how a policy that says you’ll accept stock as a gift from your donors doesn’t give you or your staff all the tools you need actually to accept these gifts. You’ll also need procedures that give step by step instructions on how to receive, deposit, credit and probably liquidate that stock. Receiving stock through an automated transfer to your brokerage account is quick, safe and easy for your donors, if the account is established and you have the transfer instructions readily available. Receiving stock certificates is similarly quick and easy if you have all the additional forms and documents your bank will require to document the transfer and allow you to deposit in your brokerage account.

Your financial institution can and should help you develop those procedures. Check with your representative and don’t leave this easy money on the table!