Know When to Donate to Founder-led Organizations

Founder

Tyler Morning Telegraph, Give Well Column By Dawn Franks July 22, 2018

The nonprofit founder sitting across the table is frustrated by the challenge of raising needed funds. Busy developing and delivering services in the nonprofit’s early years, there’s been little time for fundraising.

I ask questions and work my way around to one I believe is critical when small organizations are struggling, especially so when the founder is at the helm.

“How many board members do you have?” They have four.

Next question: “Who serves on your board?” His response, “My wife, sister and two close friends.”

“And how often does the board meet?” I ask. I learn that’s a challenge. The founder tries to hold a conference call several times a year since his sister lives in another state and one board member works out of town a great deal.

Quick scene change. This time the founder of a 10-year-old organization that has been successfully providing services and growing through fundraising and grant-writing sits across the table. She is frustrated. The demand for services is growing; they need to raise more funds to serve more clients.

I ask the same question: “How many board members do you have?” She tells me they’ve recently added board members and now have nine. I ask about the members, and she describes various professionals, volunteers and even a researcher-writer who works in the same field. At least from the outside looking in, the board represents many parts of the community. The rest of our conversation focuses on how they might identify new funders for their work.

Founders of nonprofit organizations can be labeled as having “founder syndrome.” The term reflects symptoms exhibited by the founder such as a sense of grandiosity, poor management or an inability to delegate or make a smooth transition from founder to new leadership. A fourth symptom often listed is an unwavering dedication to the original vision for the organization.

What the founder description fails to illuminate is the importance of the individual board member’s role regardless of size or years of operation. It is the board of directors who must accept, at a minimum, equal responsibility for the governance, management and future direction.

In the case of a young organization, with a founder at the helm, equal responsibility may be a best-case scenario. For an organization that has operated for many years, the board should bear the greater responsibility. The founder should educate and train the board into their appropriate role. It is incumbent upon the board to accept the mantle of responsibility.

As donors, why should we care about any of these issues? Doesn’t it all boil down to whether the organization is providing a needed service? For some donors, it might stop right there. The organization is doing good work, you know the founder or board members and trust their leadership. Or, the donation isn’t large enough to bother with questions.

In either case, donor beware is a fitting principle. A little investigation may be all the donor needs to make an informed decision. Join me in asking questions.

What size is the board of directors and do any appear to be related to each other? Check for same last names and beware any board less than five members in size.

There is no perfectly sized board of directors. There is one that is right-sized for the organization’s mission and work. I like to see boards with at least seven members, no one is related by blood or marriage and different skills sets are represented.

If it is a larger organization, has been around for some years and still has the founder at the helm, it becomes even more important to see a larger board that represents the broader community.

While there are other important factors to consider when donating to a founder-led organization, this one is critical. If you love the work a small founder-led organization is doing and want to support their growth and development, encourage them to grow their board. If you love the work of a larger organization that is founder-led, look beyond the board to strong executive management and a future vision from the board. The wise donor asks questions, listens and learns. It leads to wise giving.

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