Given how much time board members give to their charity, is it ethical to also expect them to donate?

Yes, it is. Volunteers are usually the best source of funds for a charity, and it would be irresponsible not to ask. Board members are among the most committed volunteers, so should be the likeliest of all to give. This does not mean only the rich can serve on boards or volunteer; I’ll deal with amounts later in the column. In some cases a quite small amount is sufficient.

Charity board members should be there because of a passion for the cause. If they do not give, why would they think anyone else should? To a prospective donor or grantor, it looks as if the people most closely aligned with the organization do not deem it worthy.

Many grant-making organizations ask what percentage of the directors have given in the past year, and they expect a response of 100%. A lower number may cause the grant submission to sink to the bottom of the pile, thus harming the organization’s ability to carry out its mission.

A responsibility for ensuring resources

A key responsibility of any board is ensuring that the organization has sufficient resources to carry out the strategic plan. A failure to give can really hamper efforts to obtain those resources. It is MUCH harder to ask others for money if you have not given yourself, and unless you are an excellent actor it will show. Board members making an “ask” or accompanying others to a foundation or other major potential funder may find themselves being asked about their own gift. This leads to a very uncomfortable situation if they haven’t donated!

Most charity directors also help bring in other resources and this is essential to the survival of most charities. Some are excellent at asking for major gifts. All can and should help identify grantors, sponsors, donors and partners who can provide resources to the charity. All should find other ways to support revenue generation as well, such as bequests, event ticket sales, auction contributions, golf tournament participation and whatever else they reasonably can do within their own resources. Donors want to see key volunteers involved, not just see or hear from paid staff or external advisors.

The gift amount

In most charities, directors are asked for a gift appropriate to their financial circumstances, rather than an absolute amount. Some ask that a “stretch” gift be given, or an amount significant to the giver, or one of the top three donations that director gives that year. A charity cannot always ask to be the primary recipient of gifts from a director since some sit on the board of more than one charity. Organizations such as foundations and private schools often specify a high minimum amount.

Another reason for not setting an amount in most charities is the importance of community knowledge at the board table. If an organization is serving people from many socio-economic levels, or primarily people living in poverty, the board composition should reflect that. A high amount would deter their participation on the board. However, directors living in poverty have told me that they are insulted and demeaned if other volunteers are asked for donations and they are not. Their donation may be five dollars and it may be given proudly; later, when their life turns around, a much larger donation or bequest may arrive.

Communicating an expectation of giving

A requirement to give should not come as a surprise. Prospective board members should have the information they need to make an informed decision before joining a board. Many organizations now seek an advance written commitment from candidates prior to their election that they will fulfill the organization’s expectations of a board member. Such commitments usually reference the director’s job description and may highlight areas such as meeting attendance, serving on a committee, participation in special events, compliance with a code of conduct and annual giving.

Some organizations who have not previously had this requirement struggle with the transition. The board has passed a policy requiring annual giving by directors but some directors are resisting. They may give in if their refusal will harm an important grant application. I believe it would be inappropriate to try to remove them from the board early because of a refusal. See if a heart-to-heart with the chair can change their mind. And make sure your policy treats all candidates the same; incumbents running for re-election should sign the same commitment form as newcomers.

Making a director WANT to give

I have found that the best way to get directors to want to give is to have them directly involved in, and leading, regular strategic planning. Once they have a creative thinking session about the world they want the charity to help create, and their role in making that happen, they want the organization to have the resources to do it. They can see the need for additional monies to successfully implement strategic priorities they have chosen and to achieve the outcomes they have specified. Their heart is much more engaged. It will show in all their communications with supporters and probably in the amount of their cheque.

Nonprofits that aren’t funded by gifts

If an organization expects others to give, they should in my opinion expect the directors to give. But of course over half of the nonprofits in Canada are not charities, and most of those aren’t even set up to take donations. Directors in those organizations should pay fees and be part of revenue generation but not necessarily through a gift. A small number even pay their directors, something that almost never happens in a charity and that would be illegal for a charity in some provinces.

Some nonprofits cannot get charitable status but rely on donations; many of these are advocacy organizations. Directors of those organizations should expect to give even though no tax receipt is possible.

There are also foundations and some nonprofits that get all their funds from a single corporation or government. They are not asking for monies from anyone else. Directors in those few organizations have the luxury of focusing on how the funds are allocated and invested, and on governing the organization, without having to worry about bringing the money in.

Your gift decision

If you are already on a charity or advocacy organization board and being asked for a gift, please drop the “I already give my time” thinking. Consider what the organization needs from you, and what you can provide, not only with a gift but also to help with revenue generation generally. Review what you were told when you joined. If there was no candidate information package, volunteer to help create one.

If you don’t care what the organization needs to carry out its mission, it is unlikely you will make your knowledge and skills available sufficiently either. You may want to find another voluntary sector board that better suits your passion, or limit your board service to for-profit boards that pay directors.

Since 1992, Jane Garthson has dedicated her consulting and training business to creating better futures for our communities and organizations through values-based leadership. She is a respected international voice on governance, strategic thinking and ethics. Jane can be reached at jane@garthsonleadership.ca.

Because nonprofit organizations are formed to do good does not mean they are always good in their own practices. Send us your ethical questions dealing with volunteers, staff, clients, donors, funders, sponsors, and more. Please identify yourself and your organization so we know the questions come from within the sector. No identifying information will appear in this column.

To submit a dilemma for a future column, or to comment on a previous one, please contact editor@charityvillage.com. For paid professional advice about an urgent or complex situation, contact Jane directly.

Disclaimer: This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.

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