The Case Against Board “Give or Get” Policies for a Nonprofit Organization

For nonprofit organizations, especially public charities, individual Board member giving is almost always a sensitive subject. Board giving is usually an important benchmark for nonprofits and frequently is treated as a “badge of honor” when an organization can report that 100% of its Board members have made an annual contribution. Board “give or get” policies may help some organizations reach Board giving goals, but they are complex and often hard to enforce, quantify, and manage.

It is very common for organizations to have a Board giving policy requiring a minimum annual gift from each Board member. Some organizations have a “give or get” fulfillment method within their Board giving policy, which generally means that a Board member can fulfill their minimum annual gift requirement through helping the organization to acquire funds from a third party in place of their own gift.

 “Give or get” policies seem like a good idea in theory. They allow individual Board members additional options to fulfill their annual minimum Board gift requirements and can make Board service more attainable for Board members who have limited personal funds but may be able to facilitate acquiring funds from others through their network and fundraising skills.  

The problem is that the “get” options are unlimited, usually not well-defined, and can be hard to predict. Consequently, managing the “get” part of the Board giving policy can quickly spiral out of control becoming a nightmare to oversee, enforce, and sustain.

 Moreover, “give or get” policies can make it more difficult to determine if Board giving goals were met and to report on the total funds raised and the percentage of Board members who made gifts. Together these factors can adversely affect an organization’s good reputation and lead to hurt feelings among individual Board members relying on “get” options to meet their minimum annual Board gift.

Board Giving Policies in General

Individual Board member responsibilities, including annual giving requirements, must be communicated clearly to each potential new Board member before a Board service offer is made and acceptance can be received. If there is a required minimum annual Board gift, this amount can best be communicated and administered through a Board giving policy.

The Board giving policy is used to set the minimum annual gift requirement, the annual reporting period, and a description of allowable gifts. For example, a basic Board giving policy will include the minimum annual gift amount (such as $5,000), a requirement that the funds must come from the Board member’s own resources, the annual fulfillment period (usually the same as the organization’s fiscal year), and the type of allowable funds that can be accepted (most often cash).

The Challenges of Give or Get Policies

The oversight and administration of a Board giving policy can get very tricky when the policy is expanded to allow fulfillment through a “give or get” option.

A direct Board member gift is relatively easy to document and substantiate. A Board member’s role in helping the organization to acquire funds from a third party is much more difficult, and raises issues such as determining who was primarily responsible for making the contact, negotiating the funds transfer, documenting the fair market value when the contribution is made in a form other than cash, and pinpointing the timing related to annual gifts, both actual and potential.

A few demonstrative examples of managing a “give or get” policy will paint a picture of how the challenges are numerous and often complex, with no two situations that are exactly alike:

Situation #1 – A Board member in their second year is claiming to be close to bringing in a new prospective donor that could be making a large gift. The prospective donor has been on the organization’s prospect list for many years but has never contributed.

Situation #2 – A new Board member is very friendly with a current donor who has been making small annual gifts and is close to convincing the donor to make a significant estate gift through their will.

Situation #3 – A long-time Board member helped to secure a large gift ten years ago from an affiliated chapter on whose Board the Board member also serves. The one-time gift was for $100,000 but was highly restricted to a narrow set of small programs that have had very little activity over the years.

Each of these situations has the potential to provide a net benefit to the organization but each also has a different set of possible repercussions. The following highlights some of the key issues and complications that can arise from the situations described above, but there are many others that could surface:

Analysis of Situation #1 – This situation can create tension between the Board member and the staff in the organization’s development department over who was, or will be, primarily responsible for the solicitation if successful in the future. It is not uncommon for prospective donors like this one to hint at their willingness to make a large gift for years without committing to a formal pledge or a specific gift amount which adds to the uncertainty and creates timing issues for reporting. Meanwhile, the Board member may be tempted to defer their gift for multiple years based on soliciting of this one prospective donor.

Analysis of Situation #2 – In the long-run, the large estate gift could be a big benefit to the organization. However, estate gifts are hard to value, can change at any time, and the benefit could be many years in the future. Consequently, it is very challenging to value this potential gift and determine how it would offset the Board member’s minimum annual gift responsibilities.

Analysis of Situation #3 – This situation comes up a lot and raises tricky questions about how long a larger benefit from many years ago should be relied upon to offset annual Board minimum gifts. Further, foregoing unrestricted annual Board gifts in favor of a single restricted large gift for a relatively inactive set of programs has probably resulted in  a net negative to the organization.

These situations can have other potential pitfalls as well, including how other Board members who regularly make their minimum Board gifts will feel about Board members who get an easy pass on this important obligation.  

Planning Tip – To help make Board giving policies clear and easier to enforce, it is best to keep them simple and only allow cash gifts directly from Board members to satisfy minimum Board giving requirements. Do not include other choices such as a “give or get” options to meet minimum Board annual gifts. Instead, include an “at the Discretion of the Board Chair” statement for when a Board member is unable to fully meet their minimum Board gift and needs to explore temporary alternative options until they can meet the requirement in the future. This simple solution is a better option than institutionalizing a permanent give or get policy, which often becomes hard to manage and incentivizes potential bad behavior.

Other Considerations

It is important to not lose sight of the organization’s big picture priorities when it comes to Board giving.

Having a Board giving goal of 100% is often a bigger factor than the total Board gifts collected each year. For example, consider a nonprofit organization with a $2,000,000 operating budget with 15 Board members. If this organization has a minimum Board gift requirement of $5,000, it will only collect $75,000 from the Board, which is a very small percentage of the total budget.

Finally, when it comes to Board giving, organizations should strive to build a Board culture of give “AND” get. Board members are expected to support the organization in as many ways as possible, which includes making their annual gifts, encouraging others to give, assisting staff with solicitations, and helping the organization obtain corporate sponsorships and other future sources of funding. These efforts should have no impact on meeting minimum annual Board giving requirements.

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