Q:  We have a number of different board committees, each with its own goals and activities. In many cases, the activities the committees want to undertake cost money. The executive board has determined what activities it will and will not support. In one instance, where the executive board denied financial support, someone in the community volunteered to donate the money to cover the expenses that would have been incurred.

The executive board is saying that the committee cannot accept the money. I want to know whether:

  • A committee project that is not approved by the executive board can be carried out with independent funding?
  • Such donations, if accepted, should be made to/through the organization, directly to a committee chair (or member), or if the donor should pay for the items directly, without going through the organization at all?
  • There should be guidelines for accepting earmarked donations to fund activities that are outside of the budget?

 

A:  This is an interesting question on so many levels. One of the issues that makes this interesting to me is that your executive board is making the decisions about what is to be funded. Committees are committees of the full board, not of the executive committee. But then again, you are calling it an executive board… no wonder the group has assumed it can make these rules. I suggest you look at the powers that have been granted to your executive committeein your bylaws. My guess is that you’ll find this is not one of them. You may want to start by determining who, if not the full board, should have the final say – perhaps the budget committee – and what criteria that group will use in making its decisions.

Granted, there probably would be no question if you had a gifts policy, especially one that covers this issue, so yes, make the creation of a gifts policy a priority. If you want some illustrative language, check out CoreStrategies’ Sample Gift Policies. But don’t just adopt what we have. Your needs are unique and your policy should reflect that.

I certainly appreciate the executive board’s concern regarding individual committees going after their own donors. It opens the door to donors being bombarded by different solicitors from the same organization, making the organization look disorganized. Potentially more damaging is if one or more of these solicitors ask for inappropriate gifts, including relatively small gifts from people capable of making major gifts with the “right” ask. The organization certainly can’t afford to turn off loyal donors with the “wrong” ask, or to lose the opportunity to make major gift asks – especially if some of these donors have long been cultivated and are now ready for a large ask. And, yet, sometimes the committee’s “small” project might be the perfect vehicle for a donor. Setting guidelines for determining who can go after what donors is critical.

Certainly, if a donor came to the decision on her/his own and approached a committee with a desire to contribute the money needed to pursue an activity, and if the gift is consistent with your mission, it’s not restricted so as to benefit a specific individual named by the donor, and your organization doesn’t have a policy prohibiting donations of this sort, I don’t see why the organization can’t accept the donation.

I would ensure that the gift is directed to the organization and not to a committee or individual, though. That should be the case even if the gift is restricted to pursuing a specified activity of a single committee or the donor purchases and donates an item or service needed by a committee to successfully complete its desired activity. That way you protect the donor and the organization. The donor gets any tax-deductibility to which he or she is entitled and at least a modicum of transparency and stewardship.  The organization gets all donor names into its central database and is able to better control what is happening in each of its committees.

I suggest starting with a board discussion around these issues. It might help keep your organization from devolving into the old Wild West, where every committee is in it for itself.