I’ve been having a few conversations recently with charities struggling to get their boards to agree to invest in their fundraising. It’s a common problem and I quite often get asked to advise on the best ways to overcome board reluctance to put money into growing fundraising.

Now I don’t think I have to convince anyone here of the critical importance of investment. We’ve all see Dan Pallotta’s TED talk right? We understand that money doesn’t magically appear, don’t we?

The trouble is boards very often don’t. And it’s interesting to examine why that’s the case.

One of the frustrations of dealing with non-profit boards over the years is that even the business people who are trustees of a charity seem to forget everything they now about running companies when they engage in board discussions. People who have spent decades building businesses through investing and taking risks suddenly become incredibly conservative about using a non profits resources to invest in its own development. Or heaven forfend, borrowing money to do so.

I never seek to wonder at charities with substantial investment portfolios who at the same time have fundraising functions starved of investment. How does this make sense? Any charity that can’t make more money out of investing in its own fundraising than gambling on the stock markets either shouldn’t be fundraising at all or should sack its development director.

But railing about how stupid this all is, while quite therapeutic actually, isn’t being terribly helpful.

So how do you persuade a reluctant board to back your fundraising with investment? There isn’t a foolproof recipe for this but here are some approaches that have worked for me over the years.

1. Frighten the pants off them. So think of this from the board member’s perspective. One of the basic problems with being a member of a non profit board is that it’s all risk with no upside. You don’t get paid. You are not really in control, the staff team are. If the charity does well, the board don’t benefit really but if it runs into trouble, who’s accountable? Not the CEO who’s fault it probably was but the trustees.So of course they are risk averse. Wouldn’t you be?That’s why I find it usually much better rather than excite the board with how much better life would be if we did invest to terrify them with the consequences if we don’t. A killer graph or two showing the inevitable outcome of fixed cost growth outpacing unrestricted income leading to a sad and sorry end. Or similar apocalyptic warnings. Accompanied by an analysis showing how much better competitors are doing. This approach seldom fails.
2. Have a plan. And once you’ve scared them, offer hope. A plan showing that doom can be averted but only if they invest. But the plan needs to be a good one. Considered, evidence based and convincingly argued. And expressed in terms that board members understand. You will need really good numbers which are open to interrogation by the financially minded people on the board (who others are likely to defer to on investment decisions). Clear assumptions which can be evidenced and tested. And you need to own these numbers and assumptions so you can defend them in from of the board.
3. Don’t ask for everything upfront. Rather than ask for millions at the first meeting, sell in the vision and the plan and ask for enough money to test the key assumptions. So you are telling us we will get this return on our individual giving programme over 5 years, here’s some money to go and test these assumptions and prove they hold up. And then go back and ask for more. And be prepared to repeat the cycle, each time building more trust and credibility by the time I got to the third round with a couple of my boards, the board were asking were we investing enough?
4. Make friends with your board. Manage board members as you would donors. Understand their perspectives and build relationships with them. Don’t just focus on the people who can be allies but pick off and deal with those who could be the biggest blockers. Make sure you have senior management support, the finance director as well as the CEO. You’re a fundraiser, you know how to do this stuff.
5. Tell it how it is. Be smart about how you argue the case but don’t bullshit. As Clausewitz said, no plan survives contact with the enemy*. Not everything in your plan will work (if it does the plan’s not ambitious enough). Be open about the failures as well as the successes. This builds the trust which is the fundamental thing you will need from your board.

Hard though it might be to accept sometimes, board members are people too. Time spent thinking about how it looks from the board’s side of the table and adjusting to your arguments to their concerns is seldom wasted.

So that’s all my secrets in board handling revealed. Here’s hoping none of my current trustees are reading…

*That’s the last military history reference, I promise