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Nonprofit Finance Fund
Welcome to Research Friday! As part of a continuing series, we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.
Earlier this year, Nonprofit Finance Fund (NFF) received 4,600 responses to our annual 2012 State of the Sector Survey. Since then, we’ve been using these data to share key nonprofit sector trends on issues like the rising demand for services, shrinking government support, and the precarious financial health of organizations. This week’s installment of Research Friday looks at what the survey results tell us about nonprofit board engagement in tough times.
Since 2009, our survey has asked nonprofit leaders to indicate what management actions they are taking to cope with the recession. In both 2009 and 2010, nonprofit leaders told us that they were "engaging more closely with the board" by increasing the number of annual meetings, sharing new types of reports, or in other ways. In those years, nearly two thirds of respondents (59 percent and 60 percent, respectively) ramped up their communication with the board. So what happened in 2011, and what are respondents planning for 2012?
Percent of Nonprofit Respondents Engaging More Closely With their Board, 2009 - 2012
We were surprised this year when only 41 percent of respondents told us they planned to work more closely with the board. Granted, there are very real limits to the time and resources that a volunteer board can give. We’re definitely not encouraging meetings for the sake of meetings, and at a certain point it becomes impossible for nonprofits to simply engage “more” with the board. It’s also possible that more nonprofit leaders have become accustomed to operating within the new normal. Perhaps funding uncertainty has just become business as usual, no longer so urgent that it requires an emergency board meeting. It’s also likely that we’ve all gotten a little better at planning, managing, and expecting the unexpected.
Unfortunately, the systemic resource challenges facing our sector will not go away just because we’ve gotten better at internally managing them. The big picture takeaway from our 2012 survey results is stark: for the fourth straight year, demand continues to rise while funding support is shrinking (or remains unpredictable, at best). It’s beginning to seem like something has to give; business as usual is no longer good enough. My post here last month discussed the clear and present need to think differently about the ways that we manage nonprofit organizations.
So what does that mean for the board? This year our survey added some questions aimed at uncovering how nonprofits are working with their boards. The following chart shows the collective response from 3,915 nonprofit managers.
Our Board Serves as a Resource in the Following Ways:
Predictably, most nonprofit managers say that the board is underperforming (or not performing at all!) when it comes to fundraising. According to our sampling, 34 percent of nonprofit boards make the “right amount” of donations and a mere 24 percent are willing to leverage their relationships to directly solicit funds for the organization. Only 34 percent of boards are even contributing “indirectly” to fundraising efforts through referrals or advice!
The current fundraising environment means that everyone, including board members, needs to step up their game. But not all board members are recruited for their Rolodex or their wallet, and financial capital is only one type of resource. In order to remain relevant, develop innovative solutions, and meet the increasing demand for their services, nonprofits also require social, intellectual, and human capital. Solving major societal challenges will only be possible with the right collaborations, partnerships, sector knowledge and new ideas— all things that the board can actively fuel and support. Think beyond the wallet, back to the moment that each member was recruited or voted on to the board: What motivated them to work with your organization? What about their résumé made them such a good fit? The answers to these questions can help identify hidden resources that board members can bring to bear on an organization’s most pressing concerns.
To truly go beyond business as usual, the board should think about its fiduciary responsibility outside of just the standard questions about fundraising events and making budget. We don’t need more board engagement, per se. We need board members who are willing to be accountable for their organization truly achieving its mission and then creatively using all of their available resources to help it get there.
Want on-demand nonprofit stats for a paper, blog post or grant proposal? You can use our new Survey Analyzer to slice and dice our national data by state, sector, and organization size.
Angela Francis, Senior Associate at Nonprofit Finance Fund, can be reached at firstname.lastname@example.org and on Twitter @NFF_West. As a 501(c)(3) nonprofit, NFF pushes for improvement in how money is given and used in the sector. Since 1980, we have worked to connect money to mission effectively, so that nonprofits can keep doing what they do so well. NFF provides financing, consulting, and advocacy services to nonprofits and funders nationwide.
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Click here to read "Research Friday: The Results are In - State of the Sector 2012" by Angela Francis.