Board Giving and the Generosity Circle

My last two blogs this month have addressed “10 Fundraising Mistakes That Are Easy to Fix.” In addition to a little venting, I’ve challenged board members to address the board policy issues that impact a ministry’s fundraising program. (Example: Who evaluates fundraising effectiveness?)

Let me now turn the discussion in your direction. Hopefully, you’re not just a “donor of record” (as some lame board policies require), but you’re a generous giver to the ministry where you serve as a board member.

In the ECFA Governance Toolbox Series No. 1: Recruiting Board Members, the “Board Member Read-and-Engage Viewing Guide” lists six criteria for board nominees:
   The 6 Ds:
   1. Discerning Decision-Maker
   2. Demonstrated Passion
   3. Documented Team Player
   4. Diligent and Faithful Participant
   5. Doer (“Walks the talk!)
   6. Donor

Here’s the commentary on the 6th D: “Because Jesus said in Matthew 6:21, ‘Where your treasure is, there your heart will be also,’ this nominee is already a generous giver to our ministry. (Note: Many organizations define ‘generous’ as prioritizing your organization in the Top-3 of a person’s annual giving. Board members at all income levels can be generous.)”

So, while your ministry can easily fix the 10 fundraising mistakes, only you can discern if your giving is in the “Generous Giving” circle or just the “Donor of Record” circle. While a generosity expectation may not have been communicated to you when you were recruited to the board, this week would be a good time to self-assess your passion and commitment (and generosity level) for the board(s) you serve on.

Fred Smith, Jr., president of The Gathering, has noted that there are at least seven models of giving in the Bible—and his insights will help you think biblically about your giving.

He writes, “A few years ago I heard an earnest, well-intentioned speaker present a message on the topic of the Biblical model of giving. It was the story of the widow’s mite and, as you might guess, the conclusion was we should be willing to give everything we have.

“I started thinking about that because I had heard almost my whole life that this story was the Biblical model for giving and, ideally, the gold standard. However, as I started looking at the different stories about giving in Scripture I realized there is a wide diversity of giving styles in Scripture—not just one.”

Smith lists seven examples: David (a leadership gift), Solomon (the extravagant giver), Elisha (gift of an opportunity), The Wise Men (team givers), Zacchaeus (exuberance and precision), The Widow (giving even to a flawed institution!), and Barnabas (powerful return on investment).

So how would you respond to Fred Smith’s Question? “I hope you ask yourself which of these individuals would be most like your own style of giving, and in doing so, you begin to recognize how your giving is a part of God’s workmanship in your life.”

My Question: Why should I give to your ministry if your board members are giving more generously to other ministries?

10 Fundraising Mistakes That Are Easy to Fix (Part 2)

In my last blog I listed five of the 10 fundraising mistakes that are easy to fix.
Again, I’m not suggesting you put these on the board agenda (it’s staff work, not board work)—but from a board policy perspective, who owns the annual evaluation of your fundraising program?

Here are the other five mistakes:

MISTAKE #6: Asking major givers for minor gifts.  One size doesn’t fit all. In fact, Mark Dillion believes most ministries have four distinct segments of donors. If so, each segment should be challenged to give at an appropriate, but differing level:
   • The Gifted Giver (2-5% of givers) 
   • The Thoughtful Giver (15-25% of givers) 
   • The Casual Giver (35-50% of givers) 
   • The Reluctant Giver (perhaps 33% of givers)

MISTAKE #7: One-way communication.  Think telephone, not megaphone. Ask your givers (here’s a thought!) why they give. It’s the third question in Peter Drucker’s classic five questions that every organization must ask: “What does our [donor] value?”  Ask: What do you appreciate about our ministry? What would you change? What do you value about our donor appeals, newsletters, website, special events, etc.?

MISTAKE #8: “This is a return envelope!” Vince Lombardi, the celebrated coach of the NFL’s Green Bay Packers, would start each season’s first practice session with this line “Gentlemen, this is a football!” Trust me, if Coach Lombardi was a fundraising consultant, he would begin each session with the four fundamentals that are often missing in direct mail pieces. Don’t let inexperienced staff (or board members) move you off the fundamentals:
   1. The outer envelope (Interest me! My opinion: mailing labels cheapen the message.)
   2. The letter (Inform and inspire me!)
   3. The response device (Direct me! What do you want me to do?)
   4. The return envelope (Make it easy for me. Even if I give online, maybe this time I won’t. Please give me a return envelope.)

MISTAKE #9: Short letter? Long letter? Wrong question! Roger Ebert, the movie critic, famously said, “No good movie is too long and no bad movie is short enough.” Ditto board meetings and donor letters. My wife reads every donor letter from one of her favorite organizations—because the letter is well-written, inspiring, interesting and packed with Kingdom impact. While focused on human crises, the letter never manipulates. She will frequently insist I read the letter.  Most other letters (short or long) are tragically boring. Those have a short path: mailbox to waste basket.

MISTAKE #10: Ask. Ask. Ask. Ask. Ask.  Hey! Take a breath and report back on how my gift helped introduce a person to eternity, or changed a marriage, or gave hope and healing in Jesus’ name. I understand you need more money—but I need more information. As I pray, discern and sort through competing requests, I always tilt toward the ministry that sees me as a partner, not a feedbag. Try this: Ask. Thank. Report. Inquire. Ask again.

QUESTION: When is the last time your board asked for an evaluation of your fundraising program and practices?

10 Fundraising Mistakes That Are Easy to Fix

There is a wide continuum of beliefs concerning the board member’s role in fundraising. Policy Governance® zealots warn against board committees that replicate staff work. According to John Carver, “Board committees are to help get the board’s job done, not to help with the staff’s job.” You may disagree—and that’s OK. 

Whether you’re discussing fundraising in your board meeting, or wearing your volunteer hat to suggest improvements, it’s 100 percent certain you’ll be talking about fundraising when your year-end results are in. (Was it a thumbs-up or thumbs-down year?)

So…for what it’s worth, here’s my list of 10 fundraising mistakes I notice frequently. The good news—all 10 are fairly easy to fix. I’m not suggesting you put these on the board agenda (it’s staff work, not board work)—but from a board policy perspective, who owns the annual evaluation of your fundraising program?

Here are the first five mistakes:

MISTAKE #1: Donor letters that thank every person for their faithful giving—when, in fact, the letter is also sent to non-donors! (Easy Fix: segment your list into donors and non-donors.)

MISTAKE #2: A donor gives a gift to the ABC program, but the president’s generic thank you letter highlights the XYZ program. (Easy Fix: segment your thank you letters to appropriately report on progress for the specific gift given.)

MISTAKE #3: When a donor gives online, the emailed receipt is inappropriately designed for product purchases with a “shipping and handling” line, etc. (Easy Fix: use online giving software. Using a "one-size fits all" software program only communicates to donors that you don’t have your act together. Board members: give an online gift today--and assess the quality of the giving experience, and the receipting process.)

MISTAKE #4: When Mary Smith receives an appeal letter, or a thank you letter, addressed to “Dear Mrs. Smith,” but the CEO calls her by her first name, “Mary,” it’s one more indication that there is a sloppy, undisciplined development approach. (Easy Fix: customize every donor record. Good software will help you do this.)

MISTAKE #5: Focusing on the year-end tax benefits of giving versus the importance of the ministry’s work and results. When we appeal to tax-saving versus soul-saving, we miss the opportunity to disciple donors in what Wes Willmer calls the “Revolution in Generosity.”

Watch for the other five mistakes in the next blog.

QUESTION: When is the last time your board asked for an evaluation of your fundraising program and practices?

Board Chair Best Practices #4: The Meeting Before the Meeting

Last month I began a blog series on board chair best practices. Here’s Board Chair Best Practice #4: 

#4. The Meeting Before the Meeting

You’ve heard this one: “As the board goes, so goes the organization. And as the board chair goes, so goes the board.”

The board chair’s role in thoughtfully and prayerfully leading the board—especially during board meetings—is critical to a healthy board. And a common best practice is for the board chair and the CEO to have a meeting before the meeting. 

John Maxwell’s helpful book, Leadership Gold: Lessons I’ve Learned from a Lifetime of Leading, includes an insightful chapter, “The Secret to a Good Meeting Is the Meeting Before the Meeting.” Maxwell credits his meeting management wisdom to Olan Hendrix, one of his mentors (and the first president of ECFA).  

In 10 quick-reading pages, Maxwell builds the case for turning routine meetings into productive action-oriented gatherings. It’s excellent advice for board chairs and CEOs to meet (at least by phone) prior to every board and committee meeting. Following the counsel of Hendrix, Maxwell writes that the meeting before the meeting: 
   1) helps you receive buy-in
   2) helps followers to gain perspective
   3) increases your influence
   4) helps you develop trust
   5) avoids your being blindsided.

The “no surprises” rule is critical for the key people in each meeting—and typically, that means you must meet with them in advance.   

Maxwell preaches: “If you can’t have the meeting before the meeting, don’t have the meeting. If you do have the meeting before the meeting, but it doesn’t go well, don’t have the meeting. If you have the meeting before the meeting and it goes as well as you hoped, then have the meeting!”

You’re probably not going to cancel a pre-scheduled quarterly board meeting—so that puts even more importance on ensuring that “the meeting before the meeting” is effectively conducted.

Proverbs is filled with leadership wisdom on seeking counsel; and challenges to inspire--not manipulate--people (and board members).  Proverbs 24:5-6 (The Message):

“It’s better to be wise than strong;

intelligence outranks muscle any day.

Strategic planning is the key to warfare;

to win, you need a lot of good counsel.”

QUESTION: Think back to a meeting that went south. Would a meeting before the meeting have helped?

Board Chair Best Practices #3: Pick Up the Check!

This month I began a blog series on board chair best practices. Click here to read Board Chair Best Practice #1 and Best Practice #2. 

Here’s Board Chair Best Practice #3: 

#3. Clarify Fuzzy Roles With a Prime Responsibility Chart

This week, a colleague shared a comment he heard from a board chair of an outstanding national ministry. When asked what the board chair’s job description entailed, this person joked:

“I can’t remember all my duties—but certainly one of them
is to pick up the check every time I have lunch with our CEO!”

I’ve never seen “pick up the check” on board chair job descriptions—but maybe we should add it! Here’s a tool, however, that will add clarity to the board’s work: “The Prime Responsibility Chart” (click here to download). Leveraging this one-page template has been a critical best practice in my board toolkit for over 30 years. 

A board member, Bill Benke, introduced it to me when he served on the board at Camp Sambica in Bellevue, Wash. Benke used a version of this chart when he was a strategic business analysis executive with The Boeing Company. The chart is simple and straightforward and can (and often should) be revised at any board meeting—based on policy decisions, cash flow, economic environment, and experience level of the CEO and senior team.

Most boards assign decision-making functions to various individuals and/or committees, including:
   • Board of Directors (example: hire and fire the CEO)
   • Executive Committee (minor decisions between board meetings)
   • Board Chair (appoint committees)
   • Board Treasurer (create finance committee agendas)
   • Finance Committee (recommend an auditor)
   • CEO (hire and fire direct reports, etc.)

The most important principle: only one person (or committee, etc.) has “Prime Responsibility” for a task or responsibility. Download the template to see how levels of responsibility can be assigned—based on board policy—using just three designations:
   • P = Prime Responsibility
   • A = Assistant Responsibility
   • AP = Approval Required

One board chair best practice is to ensure that roles and responsibilities are crystal clear between the board and the CEO, and between the board and its committees. This chart will help you eliminate all fuzzy roles!

Why is this so important? 

Proverbs 24:10 (The Message) reads, “If you fall to pieces in a crisis, there wasn’t much to you in the first place.” Don’t wait for the crisis (board/CEO conflict over fuzzy policy) to clarify board roles. As board chair, make clarity one of your top priorities—and eliminate conflict and friction before it happens.

POP QUIZ: At your next meeting, give the board a pop quiz with three questions on roles and responsibilities—and see if you have appropriate clarity.

Board Chair Best Practices #2: Become a Student of Your CEO

Last week I began a blog series on board chair best practices. Click here to read Best Practice #1: Ensure that there is 100 percent board participation in the CEO’s annual performance review. 

Here’s Board Chair Best Practice #2: 

#2. Become of a student of your CEO and inspire your CEO to become a student of you.

Almost fifty percent of the time in my workshops and consulting, I have hallway conversations with really smart people who say something like, “I just don’t get my CEO (or board chair). We’re rarely on the same page. I’ve chaired other boards—and my relationship with the CEO was almost perfect! Help!”

So I go down the well-worn path: “How many hours have you invested in studying and understanding your CEO this year?”

“Is your CEO a reader or a listener? What are your CEO’s Top-5 strengths on the Gallup StrengthsFinder assessment? What is your CEO’s social style (driver, analytical, amiable or expressive)?  (Watch the 3-minute video on social styles.) Do you know your CEO’s spiritual gifts (leadership, mercy, teaching, etc.)—and, if so, are you leveraging them—or expecting them to exercise strengths and spiritual gifts that God hasn’t given them?”

I explain that every CEO must be a student of their board chair—and every board chair must be a student of their boss. That’s why I urge them to study two resources:

• Read the Harvard Business Review classic article, “Managing Your Boss,” by John J. Gabarro and John P. Kotter. While written for employees, the principles are easily transferable between CEOs and board chairs. You both must own and navigate the relationship—not in a manipulative way—but in a mutual respect way.

• Writing a “memo about me” is a terrific exercise for both the board chair and the CEO, suggested by leadership guru Marshall Goldsmith in his convicting book, What Got You Here Won’t Get You There: Discover the 20 Workplace Habits You Need to Break. Chapter 12, “Special Challenges for People in Charge,” encourages leaders to write a memo, “How to Handle Me.” If written with humility and transparency, it’s a brilliant, brilliant tool that would smooth out much boardroom conflict.

What would happen if you applied the “managing your boss” wisdom from Gabarro and Kotter to board chair/CEO relationships?

“At a minimum, you need to appreciate your [CEO’s] goals and pressures, his or her strengths and weaknesses. What are your [CEO’s] organizational and personal objectives, and what are his or her pressures, especially from [the board and others]? What are your [CEO’s] long suits and blind spots? What is the preferred style of working? Does your [CEO] like to get information through memos, formal meetings, or phone calls? Does he or she thrive on conflict or try to minimize it? Without this information, a [board chair] is flying blind when dealing with the [CEO], and unnecessary conflicts, misunderstandings, and problems are inevitable.”

In addition to a 12-point checklist the article addresses that critical question: “Is my [board chair/CEO] a reader or a listener?”

“Peter Drucker divides [CEOs] into ‘listeners’ and ‘readers.' Some…like to get information in report form so they can read and study it. Others work better with information and reports presented in person so they can ask questions. As Drucker points out, the implications are obvious. If your [CEO] is a listener, you brief him or her in person, then follow it up with a memo. If your [CEO] is a reader, you cover important items or proposals in a memo or report, then discuss them.”

Obviously…all of the above is just as critical for CEOs as they become students of the revolving person in the board chair. (More on that down the road!)

QUESTION TO BOARD CHAIRS: How many hours have you invested this year in becoming a student of your CEO’s learning style, strengths and spiritual gifts? And how will you help your CEO to understand your style and strengths?

Board Chair Best Practices #1: CEO Annual Reviews

I’ve heard this refrain numerous times—and it’s true: “As the board goes, so goes the organization. And the board will be no more effective than its chair.”

Here’s my Board Chair Best Practice #1 (stay tuned for more):

#1. Ensure that there is 100 percent board participation in the CEO’s annual performance review. Since the board chair is not the CEO’s boss, never-ever-ever should the board chair conduct the CEO’s annual review as a Lone Ranger.  

The best boards agree with the CEO—in advance—on the format and setting for the CEO’s annual review and the protocol for how the CEO responds with next steps, following the review. 

My opinion: 50 percent of the annual review should be based on agreed-upon annual measurable goals, set at the beginning of the year. (Peter Drucker said, “If you have more than five goals, you have none.”) 

The other 50 percent: focus on biblical qualities, including character, leadership, vision, passion, and other critical characteristics per your ministry’s culture, DNA, and mission.

Some organizations conduct a 360 review (the board, the CEO’s direct reports, and the CEO’s own self-assessment). Others develop metrics to discern if the core values of the ministry are being lived out, and if so, to what degree.

As a reminder, though, heed this wisdom from Ten Basic Responsibilities of Nonprofit Boards (Second Edition), by Richard T. Ingram, regarding CEO performance reviews: 

“In the end, although we may not be able to precisely define what outstanding leadership is, we know it when we see it! Let’s admit that this very subjective process is more art than science, more human than anything else. We can and should use various objective measures or strategic indicators of the organization’s progress on its financial condition, for example, as part of the assessment process—but whether a leader stays or goes so often hangs on much more subtle factors.”

And, as I’ve often quoted in this blog, here again is Ram Charan’s insight from Owning Up: The 14 Questions Every Board Member Needs to Ask, by Ram Charan

“There is nothing more important for a CEO than having the right strategy
and right choice of goals, and for the board, the right strategy
is second only to having the right CEO.”

He also notes, “With the right composition, a board can create value; with the wrong or inappropriate composition, it can easily destroy value.” So while you’re conducting the annual performance review of your CEO, be sure you schedule the board’s annual self-assessment process.

As the board goes, so goes the organization. Great boards are intentional about spiritually discerning God’s direction and how they will steward all the resources of the ministry—including their CEO’s leadership and tenure. Many times, however, it’s the board chair that must lead and put the CEO’s annual review on the front burner (sorry—bad metaphor!).

QUESTION: Is your board creating value or destroying value when it conducts your CEO’s annual performance review? (If you’re not conducting an annual review—you’re not adding value, and you’re missing an opportunity to grow your leadership.)