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The Generational Shift of Nonprofit Boards

by Chris McLeod

September 8,2009

Nonprofits in Charlotte are experiencing a generational shift in board membership that is likely to be more significant in determining the future of Charlotte’s cultural community than how these organizations navigate the decline in corporate support or the economic downturn. Our most seasoned board members are spending more time in Linville and less time raising money for nonprofits in Charlotte. Many newer and younger board members lack the preparation to replace these rainmakers and an appreciation of their fiduciary responsibilities. How our cultural nonprofits manage this generational shift on their boards will largely determine their viability and the future of our cultural community.

This generational shift is compounded by several demographic trends that negatively impact the contributions of these new board members. Few enjoy the same level of recognition from their employers for community service as their predecessors. Executives at all levels are expected to be accessible 24/7 and increasingly tethered to their Blackberries. Business travel is more likely to take them to San Francisco and Shanghai, rather than Atlanta or Winston-Salem. Moreover, these younger board members are more likely to have greater parenting responsibilities and a spouse who works full-time.

Why is this generational shift significant?

Few of these younger board members understand that their most important fiduciary responsibility is for the financial health of the nonprofit, including raising money. Board members need to take a lead role in inspiring and inviting others to support the organization, in addition to making a generous gift themselves. A board member is not relieved of this obligation to make a personal gift if his/her employer provides financial support to the nonprofit.

Nonprofits are partly to blame for their failure to educate and explicitly communicate their expectations and fiduciary responsibilities of board members. Little attention has been paid to providing a meaningful orientation to these new board members. Few joining boards today truly understand their primary fiduciary responsibility, for the financial health of the nonprofit includes both a significant personal gift and a willingness to raise money from donors.

Many cultural organizations have not invested in their own development capacity, preferring to rely on the ASC to provide a high percentage of operating support. They fail to recognize the money they are leaving on the table. With workplace campaigns under pressure, board members must recognize that the nonprofits must invest in their own capacity to raise funds, starting by hiring a development professional who is both a member of the leadership team and capable of leading the board towards meaningful major gift fundraising.

Board giving often tells the story. A healthy and thriving nonprofit often reflects healthy and generous board giving. The percentage of board members who give is a key metric of a healthy high-functioning nonprofit. Children’s Theatre of Charlotte is an outstanding example of a high-functioning and high-producing board that is well staffed for fundraising, as evidenced by being featured as the cover story for The Chronicle of Philanthropy last fall. This article cited examples of nonprofits bucking the national decline in fundraising.

In those most successful nonprofits, an executive director outlines what is expected of board members in terms of fundraising and the board members’ personal financial commitment to the nonprofit. The professional development leader’s role is to develop the fundraising strategy and to prepare and staff the board for meaningful fundraising. Without the leadership to support the fundraising efforts of board members, few nonprofits will engage and enroll their board members to secure meaningful major gifts that are critical to their future growth and sustainability.

Many of our most important cultural institutions receive significant support from the City, County and Charlotte Mecklenburg School System (read taxpayer dollars) and the ASC. Collectively, these same board members make decisions involving millions of dollars in taxpayer and private donor support and yet many do not support the nonprofit they serve – or make token gifts of $250 or less.

Managing this generational shift of board members is more within our control than the global meltdown or the decline in corporate giving. Our cultural organizations need to thoughtfully recruit, train and staff their new board members to give, get or get out of the way. The future of our cultural community depends on it.

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