Evaluate your nonprofit from a funder’s perspective

Donors and funders don’t necessarily tell you why they won’t fund your nonprofit. Many will make their evaluation based on your organization’s presentation and reputation without sharing their objections. But, if you know the criteria by which you will be judged you can proactively prepare.

We recently had a candid conversation with corporate representatives to learn what they look for when investing in a nonprofit. Not surprisingly, the conversation started and ended with a focus on the role of the board of directors. Funders assess the board in determining whether or not to give, and the level at which they will give. That assessment includes a look for corporate representation. They want to know who is on the board, how they are involved, what they collectively give, and how much they raise. They look at small cues that communicate an organization’s capacity and board engagement: who circulates throughout the community with the executive director? Is he or she accompanied by other board members or senior staff when attending meetings or events? Do board members identify themselves as such  they circulate personally and professionally?

The funders we talked with see the board as the party responsible for sustaining and growing a nonprofit. They want to know if the board can provide the resources and funding to grow the organization, with or without the executive director. They won’t invest in nonprofits where the board does not demonstrate the leadership required to guarantee growth. Having a strong executive is not enough.

Related to current board involvement is the issue of “the bench.” Funders want to know how the current board is engaging and cultivating future board members. For community-based organizations the questions relate to the process of growing from a community board to a diverse board that integrates, welcomes and engages professionals and corporate representatives. Those we talked with mentioned the importance of boards knowing what type of leadership model they seek to emulate. While concerned about funding for today, these funders are equally focused on an organization’s ability to succeed in future years. They want to know about succession planning: who is capable of ensuring continuity of operations should the executive abruptly leave. They want to know if and how the board surrounds the executive director with professionals who can help attract people resources.

Finally, they made it clear that they invest in nonprofits where their employees provide board leadership: funding and resources follow employee board engagement.

The bar is set very high. But you can’t meet the mark if you don’t know what it is. If you have been struggling to grow your organization to a new level of operations, and seeking corporate support, you may want to consider looking at your nonprofit from the perspective of a corporate funder. What will they see?