I'M A NEW BOARD MEMBER. I figured after all these years of working with and for boards, and writing about them, too, it might be useful to experience nonprofit life from the other side of the table. In five short months, the pressures of the duties of care, loyalty and obedience have firmly taken hold.
At a recent board meeting, staff members presented two unbudgeted funding requests for approval. Both were completely out-of-the-blue, so far as I could tell -- at least I wasn't aware of them. Just minutes earlier, the board had reviewed and approved the year-to-date operating statement, which already contains an vague amount "to be raised" to cover capital projects beyond normal maintenance. Acknowledging that these proposals were outside of the approved budget, the staff pressed their cases for the urgency of the two expenditures.
Many board members -- myself included -- sat in disbelief that they were being asked to find $50K out of very thin financial air, right then and there. But the board's utter respect for the staff and the director threw it into a tense and rapid-fire discussion as members groped to figure out where to come up with the funds. Should we 'borrow' funds from the organization's own reserves? Should we try to mount a fundraising effort just as we are gearing up for the big annual fundraising event? What could be done on short notice since we'd just been told that both these projects needed to be done ASAP?
Talk about the proverbial deer in the headlights reaction -- this was it times 15! Finally -- and it took quite a few uncomfortable minutes to get there -- it was decided to mount a special appeal and combine the results with those of the traditional 'annual appeal', with the hope that the two would total the $50K needed. I wondered, isn't the annual appeal income already earmarked in the budget? What other budgeted need will go unfunded now because of this decision? I'm new -- I kept my mouth shut.
I was stunned and confused....and a little angry. What had just happened? Neither project just cropped up overnight -- both of them had been in need of remedy for years, so why weren't they part of the original budget the board approved five months ago? I felt I'd been ambushed by the staff and in a way that pushed the board into a decision-making corner with too little information and no sound plan to cover the costs. We were taking a flier on raising funds from a brand new appeal and robbing the income from an established appeal later in the year.
The director gave her blessing. There was an audible sigh of relief around the table -- we're off the hook...for now.
So, here are some of my takeaways:
There are true emergencies in organization life, and then there's just poor planning. To cast issues as emergencies or "must be done now's", when they've been deteriorating or non-functioning for years is to walk a very thin 'boy who cried wolf' line (or maybe it's Chicken Little -- you tell me). It puts emotion into what should otherwise be a reasoned decision. It may loosen the wallets of some board members, but a what long-term expense? Fundraising by threat or fear is not much fun.
Staff should never throw unbudgeted requests at a board without 1) preparing board members in advance either through committee deliberations and/or in a pre-meeting materials; and 2) presenting a concrete plan for how they might be funded. It's not okay to say "we might be able to raise $xxx by partnering with another organization, but I haven't investigated the potential of that." (In my example, I don't know how many board members had been apprised in advance of the meeting about these projects -- perhaps more than I know, but judging from the reaction, I don't think too many).
An organization that doesn't create a fund development plan to support its annual budget will be forever caught on the hamster wheel of fortune: trying to stay one step ahead of real emergencies, poor financial decision-making, and exhausted donors (trustees and staff will be exhausted, too).