How Nonprofit Boards Can Make Good Decisions -- Part 9 of 12

OK, so we know who some of the players are as we come to the Board table to discuss whether or not to use significant resources this year to purchase donor software and hire a data entry and retrieval person.

How has the CEO, working with the Chair of the Board, set up the decision? It's buried in the budget figures for the Fund Development department. Anyone who has read the proposed budget in advance will have seen that, compared to previous years, there are significant increases in the Development Department's budget.

There is no formal proposal for this change of management direction. It's predicted to be brought up by whoever first sees the budget increase and asks about it. Then the CEO plans to explain what he sees as necessary and why. If no one raises the question, so much the better, and the budget will be passed, and this, then, gives the CEO and staff license to move ahead with the plan. If questions are raised, "we'll deal with them as they arise," said the Executive.

So Paul gets his budget, and immediately sees the increase over last year (the figures are presented side-by-side in a spreadsheet exhibit prepared specifically for the Board's consideration and approval of the budget, and because the auditors have traditionally presented the financial figures this way. (Having annually audited financial statements resulted from Gloria's work with the financial staff.)

Paul is curious to see what this expense will mean, so the first thing he does is calculate the cost of fundraising. And he discovers that the cost of raising $1 has risen from about 21 cents to about 50 cents. And he wants to know why.

Here's the first hint that not only are the psycho-graphic factors working here, but additional factors as well. Pauls' job is business, law, knowing quickly the effect of changes in the balance sheet. He also has some personal objectives he wants to accomplish in Do-Good Charity. He has felt for a long time that charities typically spend "too much" on setting up to raise money. He has had some lunch conversations with Tom, who has complained about "always being dunned for money" and, to some extent, shares that viewpoint. So the discovery of the new Development Department budget figures set off alarm bells and give him a surefire bully pulpit from which to set and accomplish his own agenda.

Melinda, on the other hand, takes the opposite viewpoint. She saw the increase, too, and called the CEO and talked with him about it. She very much supports what he wants to do, because she has the ability to think business, think long term, and she wants Do-Good to be able to double it's operating budget within 5 years, so she knows it has to raise more money. She understands just enough about fundraising to know that multiple-year commitments from individuals is the way to go on this.

We'll explore the reactions/responses of the other board members tomorrow.