What Boards Should Know About Fundraising and Grants

Minnesota Hospital AssociationJanuary, 2011

Topics we will cover

•Fundraising as a Fiduciary Duty of the Board

•Self-Awareness and Strategy as the Basis

•Elements of a Fundraising Plan

•Role of Grants in Fundraising

•Board Oversight and Participation

Fiduciary Duty

In law, a person in a position of authority whom the law obligates to act solely on behalf of the person he or she represents and in good faith. Examples of fiduciaries are

agents, executors, trustees, guardians, and officers of corporations. Unlike people in ordinary business

relationships, fiduciaries may not seek personal benefit from their transactions with those they represent.

Source: Britannica Concise Encyclopedia

It’s not just about the money!

Two Distinctions

Distinction #1

– The board is responsible for assuring the organization has the means to pursue its mission.

– The board is not responsible for providing the means for the organization to pursue its mission.

Two Distinctions

Distinction #2

– The board has a crucial role in fundraising for the organization.

– Each board member’s role is different, with the collaboration of each member’s unique participation resulting in fulfilling the overall role.

Foundations of Fundraising

The board should assure:• Organizational strategic plan

– Includes plans for each department, program, and service

• Organizational fundraising structure– Where in the organizational chart?

• Organizational fundraising plan– Includes board and board member roles, goals,

and evaluation criteria

Types of Fundraising

• Annual/Regular Giving

• Special Events

• Major Gifts

• Planned and Deferred Giving

• Endowment• Capital Campaigns (w/endowment component)

• Grants

Individuals$229.03 74.8%

FoundationsFoundations$38.52$38.52 12.6% 12.6%

BequestsBequests$23.15 $23.15 7.6% 7.6%

CorporationsCorporations$15.69$15.695.1%5.1%

2007 charitable giving Total = $306.39 billion ($ in billions)

Source: 2008 Giving USA

HHS Grants In Minnesota - FY2010

• $335 billion in HHS grants nationwide• $230 million in HHS grants in Minnesota

Top Five Awards:

1. MAYO CLINIC ROCHESTER………………………………$202,165,114 2. MINNEAPOLIS MEDICAL RESEARCH FOUNDATION…...12,209,762 3. PARK NICOLLET INSTITUTE………………………………....3,594,910 4. PLANNED PARENTHOOD OF MINNESOTA ………………..3,089,686 5. MINNESOTA HOSPITAL ASSOCIATION……………………..1,475,971

Role of Grants

Generally, grants:

• Provide program funding

• May provide LIMITED operations funding

• Are time-limited and restricted monies

• Cannot be relied on for ongoing support

• Are a good component of a development plan

Grants

• Grants are legally enforceable contracts

• May involve significant commitment– In-kind contribution– Matching funds– Collaboration with other organizations

• Business plan on a program level– Benefits– Dangers

The Board’s Role

• Guardian of the mission and strategic plan• Make a personally significant gift (or gifts)• Introduce others to the giving opportunity - be an

ambassador– friends and colleagues– community leaders– businesses, corporations, and foundations

• Support the organization’s fundraising function• Assure good stewardship

Nonprofit Stewardship

• Prompt and proper gift acknowledgement

• Responsible gift acceptance, gift administration, and gift investment

• Demonstrate gifts were used as intended

• Demonstrate gifts were effective

• Cultivate an organizational culture of responsibility and honest communication

Questions to Ask First

• Does this fundraising activity – whatever it is - align with our mission?

• Is it legally and ethically sound?

• Is it the best use of our resources?

• Is it SMART (5-point test)?

• How does this activity fit into our annual and long-term fundraising plan?

Asking for Support

• Demand – and use – good training

• Demand – and use – good materials

• Work with a buddy– Fellow board member– Development director/foundation ED

• Set a good example

• Invite others to join you

• Never be the “Lone Ranger”

Thank You!

818 S. Hawthorne Avenue

Sioux Falls, South Dakota 57104-4537

(605) 336-0244 or (888) 4-SUMPTION

www.sumptionandwyland.com