The purpose of our 501(c)(3) nonprofit is to support at-risk children and orphans throughout the country. We are drafting new bylaws and are considering whether or not to include a provision requiring each director to contribute or influence $25,000 annually through direct giving, solicitation of donations, or providing professional services to the organization (beyond board work) based on the market value of such services. Do you think this is a good idea? —From a bylaw review.
No. First, I don’t think board expectations should be in bylaws. Bylaws are governing instruments, spelling out the relations between the officers, directors and members (if any). They should include the procedures of governance, including how to remove a director who doesn’t live up to the expectations, but not including the many expectations of those directors. Bylaws should be relatively permanent and hard to change. (See Ready Reference Page: “Bylaws Function as ‘Constitution’ of Nonprofit Corporations”). Expectations and other policies that are more frequently subject to change should be set by Board Resolutions and not clutter up the basic rules of governance.
Secondly, I don’t like specific figures for a “Give, Get, or Get Off” standard for a giving requirement. While people who set specific dollar requirements usually allow exceptions for those who can’t make the standard, it tends to put the people who have trouble with the standard in a difficult and embarrassing position in asking for the exception and identifying themselves as not being able to live up to the standard for everyone else. You can avoid that embarrassment by saying that everyone should make a contribution that is meaningful for themselves and leave it at that. Grantmakers who look for 100% Board participation to provide a higher score for grant eligibility will not ask whether the contribution was $25,000 or $25. Everyone will be able to check the box, without embarrassment.
Setting any dollar standard will tend to skew the board you have. And a standard of $25,000 a year will skew it hugely. If you want diversity on your board, a $25,000 pay-to-play requirement is going to cut your available pool of directors significantly. Most people in this country can’t afford a $1000 car repair without an impact on the way they live, according to some commentators. How many could afford a new obligation of $25,000 every year?
Do you want to include on your board some of the people who have recently used your services to get their first-hand perspective on how to better your program? How many of them could contribute, or would have friends who could contribute, $25,000 a year? If you don’t have a dollar standard, you may get less money from your board. But your diversity may help you create a better, more effective, program that can attract more foundation support because it works well.
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