NPO’s Board of Directors and Donors – Partners in Action – Workshop at Lay Leadership Conference, JDC Institute for Leadership and Governance

In November 2015, “Committed to Give” held a workshop for nonprofits chairmen as part of JDC Institute for Leadership and Governance’s conference for Lay leadership.
With the participation of Shuki Ehrlich, Shula Mozes, and Judith Yovel Recanati, the workshop examined the interface between lay leadership and philanthropy, and discussed ways to build an effective, longstanding and continuous relationship between the nonprofit’s board of directors and the donor. We spoke about giving strategies and matching expectations between the donor and the organization which he/she supports. The participants in the workshop had the opportunity to have an unmediated dialogue, ask donors about the interface between the donor and the lay leadership, and discuss the connection between the organization’s working strategy and the donor’s giving strategy.

Participants in the workshop included chairmen of nonprofits representing an outstanding and exciting variety of social action in all aspects of life that together present the Israeli civil society map: children, youth at risk, welfare and poverty, education, health, children’s rights, culture, elderly, people with disabilities, volunteering, Jewish pluralism, trauma victims, environment, immigrants absorption, Aliyah, legacy and more.
The workshop included a fascinating debate of questions and answers. We are delighted to share the main questions and answers which were discussed in the debate:

Question: To what extent the State’s support of the nonprofit’s area of activity strengthens or weakens the donor’s willingness to donate to that organization?
Judith: When I founded Natal (Israel trauma center for victims of terror and war) we were its only donors for about a decade. We decided to fund its activity because we wanted to establish the model, test it, and make sure that it is effective before we look for partners. And that’s what we did. We turned to the State, and it was very difficult to receive its support in this area. And yet, seeing something that already exists and is functioning well is very encouraging for the donor and helps other donors jump on board. When I meet donors from abroad, I am often asked if we receive support from the State, and if we do not, they are surprised. Natal has received very little support from the State. That being said, as a donor I don’t care too much if the State supports a specific project, but it is important for me not to be the only donor – to know that I have other partners in the organization, which goes through due diligence to ensure that it deserves our support. And I see government involvement as a good thing, but not as a must – and anyway I’d rather its support remains limited – a not too significant part of the organization’s budget.
Shula: I chose an area that no one thought was worthy: young adults without family support, those who lived in boarding schools until they reach 18, and then have no one to help them. Nobody thought they needed help, assuming the army duty was helping them. Over the past ten years we proved that these youngsters do need help, thanks to which they become contributing citizens. By supporting them, we also guarantee the value of the State’s investment in the years they were at the boarding school, and prevent their deterioration – which would bring them to welfare institutions and back to the State’s hands. Our work turns them into tax-paying, contributing citizens. It is true that we entered a field in which the State was not involved and of which it was not aware, and at some point I did not want any partners before I could guarantee that our work was properly done and was brining good results. I knew that with my own money I was allowed to make mistakes. But from the moment I understood that the model went through enough adaptations, research and evaluation and was already effective, I wanted to help as many kids as possible – for which other donors’ and the State’s support is critical.
Shuki: I would like to share the following numbers with you: the scope of giving in Israel is 16 billion Shekels, half of which is coming from abroad and the other 8 billion – from Israel. The scope of government support of the third sector is 2 billion shekels.
We asked Israel’s statistical bureau to conduct a comprehensive survey about the scope of giving in Israel: from individuals, the private sector and from abroad, and we did a segmentation of the Israeli philanthropy’s characteristics.
The results were surprising: the general public does give, but those with significant wealth do not give according to their capabilities. The government supports the third sector (including universities, yeshivas and public healthcare institutions) with only 2 billion shekels.

Question: What is the question that you ask yourselves before you decide to support a cause or an organization? What is your decision-making process?
Shuki: I claim that giving derives from the heart, but the selection of an NPO derives from the brain. A person has to be connected to the cause to which he gives, it needs to be something that is very important to him, either for personal reasons or because he believes this is an issue that needs to be advanced. Since we usually have many NPOs working in every area, the choice is rationalized, and the donor needs to analyze the effectiveness of the organization which he supports, and I remind you that we can use websites like “Midot” or “Guidestar” for that. There are several tools that can be used by the donor to review an organization’s work besides visiting the field. The key for the organization is to make the donor connect emotionally to its work, but on the other hand the decision itself is rational, and therefore the NPO also needs to prepare itself with materials and data that could convince the donor to select it over other organizations in the field.
Judith: I would like to make a distinction between relatively small donations of up to 5,000 NIS for events or other specific causes, and larger donations around which we tend to see more collaboration. The way our family, my three daughters and I, work together is as follows: there is one central area of activity in which we focus our giving, and we give, or more accurately invest, in organizations that work in that area, and which according to the strategy we created, could use this investment to promote our social agenda. Our area of activity is young adults aged 18-35. We went through a strategic process after one decade of working in the field, and we want to increase the level of giving to include collaborations with local authorities and municipalities. We want to promote this field in order to integrate young adults into politics and society, and help young adults become a force that is recognized and taken into consideration. This is why our investments in areas that are compatible with our strategy are long term – usually between 3-5 and sometimes 7 years – and relatively significant, of over 100 thousand NIS.

Question: Isn’t giving a means for gaining control?
Shula: Sometimes it is. It is a fact that many donors prefer to establish their own nonprofit over joining an existing one, and hence the high number of organizations and small number of collaborations, as everyone wants to lead his/her own way. It is a shame, as effective giving requires donors to research the field to see if someone else is already working there and if so – join and strengthen the existing work. We must also remember that there are many types of people, many characters – there are those who wherever they are, whether they are donors or professionals, will cooperate and be willing to listen and learn from others, and others who have the need to dictate everything.
The question is if giving is not a tool to make an impact – I think this is the term that donors prefer to use.
Judith: I wouldn’t like to see any connection between giving and the issue of control. In the organizations in which we are involved it is important to strengthen the leading backbone, so they can lead the way. We do not want to control the organization because we don’t have the resources for it and it is not part of our concept of giving. Giving is supposed to allow the organization to lead itself forward. We do stay in touch – sometimes the foundation’s director is part of the board of directors, or the nonprofit receives organizational consulting or assistance in creating contacts, but overall the control issue is not something that interests us.
Shuki: Influence is a blessing; the moment that we decide to support a specific field it is because we want to have an impact and create a social change. There’s a difference between influence and control.
I believe the donor is actually a partner in an initiative, as in a collaboration all sides share responsibility for the results and for understanding what they want to achieve. It is the initiative’s responsibility to do whatever is possible, while the donor needs to be part of the organization’s vision. Therefore, when we talk about significant giving, there should be a commitment for a minimal time frame. I believe there should be an agreement that the donor will support the project for more than one year, and things need to be talked through. It is important to create room for donors in order to strengthen the connection between them and the activities on the ground.

Question: What are your expectations in the first meeting with the nonprofit’s executive director or director of development whom you know that wishes to bring you on board?
Shula: I want to hear about the activities, the vision, who does what, who is working on the ground. I would like to know how much is invested in the organization’s staff. if someone mentioned before that some donors might be hesitant to fund overhead costs, which I call infrastructure, I actually do want to strengthen this infrastructure and hear about it. I want to know who else is there, what kind of research has been conducted; successful experiences and challenges that are being faced, how I can bring change and help the organization improve its work, why it is important for me to join you. These are the main issues. As a family foundation, most of our support goes to our defined field of work, but we also support a few other causes in the areas of education and renewal.
Judith: I usually do not attend the initial meetings, but I do receive the impressions from my foundation’s executive director and program director. In my meetings with the organization I hope to get an impression about the people’s commitment, their conviction that they can achieve what they want – an impression that is more from the gut and less rational.
Shuki: I will focus on the thinking process. Someone corrected me when I spoke about non-profits, saying that they should be called “non-losses”. In my view, a nonprofit is a business. When we are considering funding, we take a look at the nonprofit: how it is being run, does it have an established business plan, what’s its sustainability status. Obviously some of its sustainability relies on my support. At the bottom line, the most important aspect is the people with whom you speak.
I claim that a non-profit is a business. I do not compare, but say it on purpose. The organization is not a business, but the spirit with the vision. On the top of the organization there is the board of directors which has the responsibility to implement the vision as well as the legal responsibility to keep the business going.
I want to clarify that most nonprofits have an organization. If we cannot differ between them, the work will be more difficult.
Every chairman knows he is running a business. The term “business” doesn’t sound good when we speak about activities with a social impact, but the most important thing is that we have proper financial management, the ability to be transparent, that we respect the law and all regulations just like any other business, even though our profits are not financial.

Question: Are you interested in receiving weekly or monthly email updates about the organization? How do you want it to stay in contact with you?
Judith: That’s a big question that I keep asking myself – aren’t we wearing out our donors – also when we invite them to a gala or a lecture? The dosage is problematic because we don’t know what the other side expects from us. Sometimes a donor will read the email, other times he won’t even open it, and there are those who complain we don’t send them any materials. I don’t know the answer. There are organizations from which I receive messages and read them and others that are less connected to me. It also depends on what is on my plate at the same moment, and sometimes I just don’t get to it.
Shuki: it is all about matching expectations. When a new donor joins us and is happy to support us, we need to clarify his expectations, as there are many types of donors. First and foremost, we offer all of them to receive the annual report that we send to our major donors, as well as our financial reports. There are also those who wish to know specifically what happened with their money. It’s a matter of direction.

Question: Is there a point in insisting with a donor even if he did not show initial interest? Did it happen to you that you sat in a meeting and felt your time was being wasted?
Shula: I think it is natural, as you cannot connect to every cause. I admit there are unpleasant moments, for instance when I’m in a conference and people who really need help approach me, but we cannot always support everyone and offer them a chance to meet and talk. You need to be sensitive and learn what the donors’ fields of interests are, and if your cause is not part of them, you better save your energies and seek a donor who could be more interested. Otherwise it will frustrate both parties. You need to use your emotional intelligence.
Shuki: Allow me to go back to the heart and brain. The first connection is in the heart, not related to money or a donation. The way to engage a donor is to make him/her be involved with your work in the organization. I think the right way for each organization is to bring the donor closer to its work, make him/her connect and then translate it into giving.

Question: You are certainly flooded with requests of all sorts. What are the main motives that drive you to give? Before you build your giving strategy, how do you determine the fields that you wish to support?
Shula: The fact that we are currently investing in specific areas does not mean we will not invest in other areas in the future. The areas of activity in which we are engaged were built out of a family tradition, like with the “Machanot Olim” youth movement. My father in law was the movement’s first secretary and when they were about to shut down, we got involved. This is an example of a personal will to bring social change. Some people connect to little children, others to the elderly – but everyone has to find his/her own way, sometimes by knowing special people who do things well and make you want to be part of their project. All these things can make you prefer one area of activity over another.
Judith: Our family has a long tradition of giving – I’m the third generation. In my parents’ and grandparents’ generation, their giving strategy was not consolidated; they supported almost every area in which they were asked. As the years went by and my brother and I established our own family foundations, we went through a family process of selection and filtering. Out of countless areas of activity, we chose those that interest us the most, and invited our daughters to participate. It inspired us to choose the area of youth. At the time, we supported youth movements and young adults in Jerusalem for over a decade. We also chose to help promote the third sector through “Sheatufim”. The area of youth was selected as our leading field, and in addition we support other traditional areas of activity in our family such as the Leon Recanati Elderly Home, a Museum of Science, a rehabilitation center and more. We are all involved in our young adult’s activities, which were democratically chosen as our main field of activity.
This is something that obviously changes from one generation to another. Sometimes the next generation wishes to seek its connection to family values.

Question: What upsets you the most when working with nonprofits directors?
Judith: We are usually involved with organizations that we support, and we sit together and approve the budget at the recipient organization’s board of directors. I don’t like when in a later stage the executive director tries to convince us that “everything is all right”. Just like in any business, we compare between the planning and the execution stages and sometimes we find out that what was approved and planned was completely different than what was executed on the ground. Mistakes can happen but when someone tries to tell you that everything is under control and there is nothing to worry, it is definitely a red flag for us.
Shuki: I will talk about the places in which I’m less involved. When talking about donor retention, it is very important to remember the donors, especially those who are not involved with the daily operations, throughout the year, and not only when asking them to write a new check. I’ve witnessed this kind of wrong behavior more than once.

Question: How do you engage the donor on the longer run? You have differed between a significant donation that generates a more active involvement and a more silent and passive donation, are there any other ways to engage the donor over time?
Shuki: It is important to maintain close contacts with the donor – not only to send a weekly newsletter but also to call and congratulate him/her when needed. We need to be in touch with the donor throughout the year, and not only before the annual gala/campaign.
Judith: From my experience, visiting a project on the field is very important. Sometimes we should invite donors to a visit in order for him/her to meet the people involved and see firsthand the progress made on the ground. This is what they remember, as it is the strongest connection: seeing, meeting and having a firsthand impression.
Shuki: Each Board of Directors should hold a debate about its donors’ retention at least once every two years. The Executive Director should present the Board with a donors’ retention plan, build together the right structure and make sure it is implemented.

Question: Why does “charity begins at home”?
Judith: When people abroad ask me why we do not support projects overseas, why we don’t partner with our American counterparts in their hometowns, my answer is that if the scope of donations in Israel was similar to the one in the US, we would be able to talk about two-way partnerships. But this is not the case. Our needs in Israel are vast and we don’t have enough Israeli donors to support them. The scope of our donations is growing but it does not reach US$ 100 million per year. This is why we prefer to invest our resources in our little country.
Shuki: I believe if you can donate more, you should. Everyone has his preferred field of activity. I’m with the JDC – it is common that a member supports the organization in which he’s involved, and I am delighted to be part of JDC’s work supporting the Jewish world and its diverse needs. And these needs are very significant, not only in Israel but in other countries and regions as well. “Save a Child’s Heart”, which brings to Israel 3,000 babies for life-saving surgeries, is a proof that we are advanced enough to be part of this world.
The point that Judith made is that the donations arriving from the Jewish communities are diminishing, and it’s time for us – Israelis with significant wealth – to take responsibility. We are just growing and developing into new areas.
There is something in the process of introduction and discussion of different giving styles and areas of giving that allows the donor to develop the same way as an organization does, as it diversifies its products and services.

Question: How can a small organization convince a donor to make a big donation?
Judith: I founded Natal and started from scratch – our first donation came from my uncle. It has to be someone who trusts you and is willing to give you the first push. It is difficult to recruit a stranger to a newly established organization. Some of us have done it but it’s not easy.
Shula: I believe that a new initiative that tries to bring its first donor on board, needs to show him how it will recruit the second and third donors. If I see that they are not settling for me, but are planning how to proceed and what to do, I might be more inclined to become the first donor.