M&L Minute #2

Overview

Marts & Lundy invited 345 institutions and organizations, which represent a broad range of philanthropic segments, to participate in the second M&L Minute. The objective of the survey was to examine trends in board fundraising involvement, expectations for board contributions, and board giving patterns, specifically during campaigns.

We asked participants to share information about their institution's board size and tenure, the role the board played in the last completed campaign, giving expectations for board members, and board involvement in cultivating and soliciting gifts. Fifty-one institutions responded, garnering a 15% response rate and a diverse cross-section of Marts & Lundy clients.

The size of the respondent pool impedes certain detailed analysis. The sample is large enough to allow for thoughtful analysis by segment or by campaign size, but too small for valid analysis by segment and by campaign size. In an effort to keep M&L Minute findings brief, the Marts & Lundy team has summarized the main observations below. If you have specific questions or would like to see further analysis of certain data points, please do not hesitate to contact the Analytics team for more information.

Observations

Size of board and length of tenure appear to follow sector lines, with little correlation between size of board and the fundraising goal for the most recently completed campaign.

Higher education institutions, on average, have larger boards. This is especially true when looking at a direct comparison between higher education institutions and independent schools. (See Chart A)

The largest board has 44 members and is from a private higher education institution. Three respondents (all with campaigns of less than $25 million), from different sectors, had the smallest board size with only nine members. Fifty-two percent of independent schools reported boards with 18 to 24 members.

There appears to be minimal correlation between the size of the last campaign and the size of the board. (See Chart B)

There is no correlation between size of campaign and length of board service.

On average, board tenure for all reporting institutions was six years. The longest reported average of board service was 14 years, while the shortest was three years. Fifty-two percent of independent schools reported average board service of six years.

Roughly half of survey respondents have explicit giving requirements for board members.2 (See Chart C)

There are no apparent differences in board member unrestricted annual fund giving between those institutions with explicit contribution requirements and those without. Of those reporting requirements, 83% indicated that more than 80% of board members made unrestricted annual gifts. Similarly, 88% of respondents without contribution requirements reported board giving of unrestricted annual gifts at more than 80%.3 Almost half of all participating institutions reported that 100% of board members make unrestricted annual gifts. Another 25% of respondents reported that they had 90% to 99% board participation.

Of the 47% of respondent boards with giving requirements, more than 60% have very general guidelines, such as "make institution X a giving priority." Less than 40% have specific gift amount guidelines, such as "minimum of $25,000 unrestricted per year." These findings are likely a result of the fact that institutions must enforce any established minimum giving requirements. Schools and higher education institutions have tried implementing specific minimum giving levels, with mixed success. Marts & Lundy consultants have found that in cases where minimum guidelines were least effective, the institutions made exceptions for board members that undermined the concept of a minimum gift for all board members. Typically, general contribution guidelines are more easily supported.

Among those responding, there appears to be no correlation between the size or age of the organization and policies requiring explicit contribution requirements. The absence of trends to use specific contribution requirements reinforces the notion that institutional tradition and board culture are critical factors in the role of board philanthropy. Each board has a unique giving culture; however, the option to implement explicit contribution requirements is an interesting topic for boards to consider, particularly those that are challenged to build board capacity.

2 These M&L Minute client findings indicate that a lower percentage of institutions have board giving requirements than suggested by findings from two national nonprofit studies conducted in the past year. The Grant Thornton 5th National Board Survey, released by the Association of Fundraising Professionals on January 21, 2008, concluded that 56% of nonprofit boards expect members to make a financial contribution to the organization. Likewise, a recent BoardSource study found that 68% of boards have fundraising requirements for members to make a personal contribution (Nonprofit Governance Index 2007, page 6, www.boardsource.org/dl.asp?document_id=553).

3 Please note that the survey did not ask for the amount of unrestricted annual giving by board members.