Fundraising and giving at board and executive level can result in transformative gifts, but a new study reveals an ongoing lack of clarity about leadership-level participation.
Back in 2019, philanthropy and fundraising consultancy, Noble Ambition, partnered with Perpetual to create the Jump on Board: High-performing not-for-profit boards in fundraising white paper, which took a close look at nonprofit board participation in giving and fundraising and which, ultimately, concluded that Australia was trailing behind in both respects.
Two years on, Noble Ambition have delivered a national benchmarking report on fundraising leadership that shares insights into where boards, CEOs and heads of fundraising (HoF) are succeeding, where there’s more to be done and who’s getting it right.
Australian philanthropy – a quick snapshot
Today, more than 50% of individual giving in Australia comes from a small group of people who give over $25,000 per annum. But mass giving is in decline.
The philanthropy market is seeing a shift towards more structured giving and relationship-based fundraising such as major gifts and bequests. The success of these initiatives relies heavily on strategic support from boards, CEOs and HoF, who can significantly influence both philanthropists and organisational fundraising revenue.
First, the report asks, what role do these leaders have to play?
Academic research and market insights tell us that boards and CEOs play a critical role in fundraising outcomes and impact – and that they’re also crucial to the acquisition of major gifts. For example, many recent mega gifts and multi-million-dollar campaigns in the higher education, cultural and health sectors are the result of effective advocacy or asks by CEOs or board members, and / or feature significant gifts from board members.
“Unsurprisingly, there is a correlation between organisations with explicit board giving expectations and the percentage of board members who give (85%), compared to organisations where board giving expectations are not discussed and the percentage of board members who give (35%).”
Board members are more likely to have, or to be able to establish, the sort of peer relationships with philanthropists and high net worth individuals that can lead to major gifts. Similarly, CEOs play a crucial role in articulating their organisation’s philanthropic vision and demonstrating to prospective donors that their organisation supports the project being funded at the very highest level.
So, is this happening effectively and if not, where are the gaps? Let’s turn to the benchmarking study to find out.
The benchmarking study
The study was launched in July 2021 in the form of an online survey that invited boards, CEOs, and HoF to provide insights into the role of senior leadership in driving fundraising and philanthropy engagement, impact and success.
Specifically, the survey sought to explore:
- Current levels of fundraising engagement and impact of boards, CEOs and HoF.
- The appetite for increased engagement and impact.
- The opportunities for, and barriers to, change.
189 respondents completed the online survey. CEOs and HoF were key respondents (32% each), followed by Chairs and Board Directors (combined at 24%).
Importance of leadership engagement in fundraising
First off, the survey results found that leadership engagement in fundraising (boards, CEOs, and HoF) is considered critically important:
- Fundraising is critical to organisations, with a third of respondents indicating that fundraising represented 50% or more of their organisation’s total revenue mix.
- 89% of respondents indicated board engagement was important or very important.
- 95% of respondents indicated CEO engagement in fundraising was important or very important.
The primary reasons cited for the importance of fundraising leadership engagement at board and CEO level were:
- Leading by example (37%).
- Creating opportunities for organisations to access board networks (28%).
- A belief that board engagement in fundraising has a direct impact on fundraising revenue (28%).
- Building trust and credibility with donors (28%).
- CEO as the public face of the organisation (27%).
- CEO is seen as the organisation’s best fundraising asset (21%).
Leadership engagement varies from role to role
The survey found that, on average, CEOs spend 30% of their time on fundraising activity, regardless of sector or fundraising team size. They primarily engage in advocating, thanking donors and fundraising management.
Boards primarily engage in governance, advocating on behalf of organisations, then personal giving and introductions.
HoF primarily engage in asking, strategy and thanking donors, followed by fundraising management.
However, this data reflects how leaders are currently engaged, not necessarily how they should engage to achieve maximum impact for their organisations. Identifying the areas of greatest potential impact for each role is key to effective engagement of major donors.
CEO engagement can boost impact
For example, the survey data shows that if the CEO engages in giving, ‘getting’ (securing gifts from others) and actively encouraging a culture of philanthropy, there is significant uplift in these same areas for boards (from 66% to 82% in board giving and from 33% to 44% in encouraging a culture of philanthropy) and HoF (from 82% to 91% in encouraging a culture of philanthropy). Focusing the CEO’s time on strategic fundraising activities can significantly lift impact in other leadership group areas, such as the board and executive team.
Boards can be more engaged in getting
In terms of asking for gifts, 34% of boards engage in ‘getting’ compared to 75% of CEOs. This data suggests significant opportunity for boards to increase their engagement in this area, potentially leading to increased fundraising revenue through peer-to-peer engagement. The importance of personal giving before asking and being suitably equipped to make the ask are also important factors that will inform potential uplift in these areas.
The survey results show that perceptions of fundraising leadership performance vary, not only from organisation but from role to role
Only 15 respondents (8%) rated all leadership areas as strong or very strong across all fundraising performance categories (knowledge, engagement, impact and willingness to increase engagement / impact).
HoF are the highest fundraising performers (on average 82% across all four measures rating strong or very strong), followed by CEO’s (on average 70% across all four measures rating strong or very strong). Boards are the weakest performers, (on average 32% across all four measures rating strong or very strong).
This data reflects the fact that it is difficult to compare professional fundraisers (that is, HoF) to CEOs, who spend 70% of their time on non-fundraising activities; and to boards, whose primary governance role traditionally sees them engage less with fundraising and who are often faced with lack of clear expectations around fundraising and / or a lack of fundraising experience or knowledge. However, if board engagement in fundraising is as important as the survey responses and previous research in this space suggest, there is significant reason and room for improvement in this area.
Increasing engagement and impact means overcoming barriers
Boards’ primary barriers to being more engaged in fundraising are:
- A lack of skill and / or knowledge (41%)
- A lack of time (26%)
- The perception that philanthropy / fundraising is not the board’s role / responsibility (19%)
CEOs’ primary barriers are:
- A lack of time (52%)
- A lack of staff resources to support CEO and competing demands (both at 23%)
- A lack of fundraising skills / knowledge (12%)
HoF primary barriers are:
- A lack of time (24%)
- A lack of resources (23%)
- Competing demands on their time (20%)
- A lack of skills / knowledge / experience (18%)
Board giving remains a largely untapped opportunity
- Only 15% of respondents indicated 100% participation in giving at board level within their organisation.
- Board participation in giving to their organisation averaged at 58%.
- Boards of cultural organisations had the highest levels of giving (62%), while boards of social services sector organisations had the lowest (41%).
- Unsurprisingly, there is a correlation between organisations with explicit board giving expectations and the percentage of board members who give (85%), compared to organisations where board giving expectations are not discussed and the percentage of board members who give (35%).
- More concerning is the discrepancy between the levels of board giving participation indicated by board members (71%) and what CEOs (53%) and HoF (55%) believe boards give. This suggests a lack of transparency in reporting against board giving and a difference in either perception of or actual board giving participation between the board and the CEO / HoF.
Barriers to board giving
For-purpose organisations are increasingly discussing personal giving more openly at board levels, with some adopting 100% giving participation. Many for-purpose boards remain resistant to mandated giving participation, often based on a prevailing belief that compulsory giving undermines diversity.
However, as discussed in Noble Ambition’s previous research, mandated giving does not push for large gifts nor for only high-net-worth representation on boards; rather, its emphasis is on participation at any level, both to build a culture of philanthropy and to better understand the donor experience (one suggestion might be to sign all of your board members up as monthly donors – at a level they can afford – and then include them in your annual report regular giver list, which will be seen by prospective major donors and grant funders).
Another key barrier to giving is the assertion that board members already give generously of their advice, time and professional experience and therefore should not be expected to give financially as well. While board members are unquestionably generous donors of their expertise, the act of personal giving remains important for the organisation, its staff and donors for multiple reasons. These including demonstration of leadership, confidence building amongst the philanthropic community, the ability to make an ask, and even enhancing staff morale.
Self-ratings vs average ratings
There were more discrepancies here. For example, boards rated their own willingness to increase engagement and impact as strong or very strong at 65%, compared to a rating of 44% from others in the organisation. CEOs returned a self-rating of 93% in the same category compared to a rating of 79% from others. This indicates a limited shared understanding around what willingness to increase engagement and / or impact looks like, despite the critical shared importance in increasing fundraising revenue.
Organisations getting it right
The report features case studies from six organisations who were among the small 8% of respondents who rated their organisation’s fundraising leadership as strong or very strong across all four survey measures: knowledge, engagement, impact and willingness to increase engagement / impact.
CASE STUDY 1
Garvan Institute of Medical Research
Why they stand out:
Over the last 10 years, funding from the community has increased from $15M (2010) to $48M (2020).
The organisation’s fundraising strategy is built on the back of high-performance leadership that includes a clear emphasis on the importance of board participation. Key to this is the Foundation board recruitment process, which is focused on filling skill and / or network gaps. A bespoke onboarding method led by the Chair and Director further ensures that all board members are well versed in the business of the Institute, its fundraising strategy and its key scientific priority areas for fundraising.
Foundation board meetings present further opportunities to inspire engagement, reinforce accountability and deliver ongoing education in the business of fundraising, and the catalytic impact of philanthropic investment in Garvan’s breakthrough medical research. Senior scientists and clinician-scientists frequently present their research at these meetings, providing inspiration about the Institute’s research programs and getting Board members thinking about who among their donor networks might be keen to support the work.
“If there’s no genuine need, if there’s no structured proposal for fundraising, then you cannot activate a board to be champions for you,” says Garvan Research Foundation Director Mara-Jean Tilley “And that is super basic, but the number of organisations I hear of that don’t really know what they need funding for or haven’t communicated effectively to their board directors can be surprising.”
CASE STUDY 2
National Library of Australia
Why they stand out:
Director-General and CEO Dr Marie-Louise Ayres dedicates 20% of her time to fundraising, a figure that resulted in 130 donor interactions over the past 12 months. “That level of commitment of her time to the job makes an enormous difference,” says Dr Conor McCarthy, Director of Philanthropy. “She’s a highly effective communicator and advocate for the library and for the issues that we’re trying to improve – things like access to collections, democratisation of knowledge and so on.”
The philanthropy team sits within the office of the CEO, highlighting the importance of fundraising as a strategic priority for the organisation. Philanthropy is a standing item for every Council meeting, and a dedicated Philanthropy Working Group, comprised of the CEO, three Council members and the Head of Philanthropy, also meets fortnightly to discuss progress against action items. Like the CEO, all board donor interactions are noted and captured in fundraising reporting and analysis.
“Of the funds we raised last year, our biggest gift was brought in by a Council member, making an ask himself,” Dr McCarthy says.
CASE STUDY 3
Why they stand out:
“Our Board has established a fundraising subcommittee and recruited people specifically for their philanthropic relationships. We’ve got both people from the philanthropic sector and with fundraising experience,” says Executive Director, Kirsty Albion. “That’s probably been one of the biggest levers for us.”
Fundraising leadership, supported by the board, is very much driven by the Executive Director (CEO). Albion also plays a critical role in meeting fundraising deliverables. Her approach is focused on building honest and reciprocal connections with people who share Australian Progress’ ambition and commitment to enabling the sector to create systemic change.
CASE STUDY 4
Australian Chamber Orchestra
Why they stand out:
An organisation-wide approach starts at the top, with Managing Director Richard Evans and the ACO Board playing critical leadership roles in giving, getting and advocating. “The Managing Director is a fantastic ambassador and fundraiser. I can bring him to meet any donor and he will win them over because he has an authenticity, charm and directness which I think people really respond to,” says Jill Colvin, the ACO’s Director of Philanthropy and Partnerships.
The integration of the fundraising leadership roles – the Board, Managing Director and Head of Fundraising – is also critical to the ACO’s fundraising success, with all three working closely together. For example, the Managing Director and Head of Fundraising collaborate to identify prospective fundraising leads, while Colvin invests in getting to know individual board members both as donors and to develop bespoke engagement strategies with them.
Leadership is also demonstrated through high-profile giving at the board level, with the Chair Guido Belgiorno-Nettis AM and Deputy Chair Liz Lewin both well-known and generous in their giving. While board giving expectations are not explicit, donations are publicised and celebrated with the ACO and its donor community as a form of advocacy.
CASE STUDY 5
Equality Australia Donations
Why they stand out:
Early on, the senior leadership team identified the importance of board engagement in the fundraising space. Chair Tom Snow was already a major donor, but a broader engagement strategy was required to mitigate risk around succession planning, equalise board member contributions to philanthropy and ensure ongoing financial sustainability. In response, the team engaged Noble Ambition to provide external fundraising counsel and to support the development of a clear board fundraising capability strategy. Next, they started talking openly about the sensitive topic of personal giving. It was agreed that a board giving mandate was the right direction to take.
As a result of these discussions, all board members now contribute to Equality Australia as appropriate to their individual circumstances. Despite concerns within the sector that mandated giving can undermine board diversity, Equality Australia’s approach emphasises the act of giving rather than the monetary value of the gift.
Beyond mandated giving, board members can access a range of other tools designed to enhance their engagement in fundraising. These include external expert coaching, bespoke engagement strategies, formal training, mentoring and peer coaching.
CASE STUDY 6
Melbourne Theatre Company
Why they stand out:
“I have a personal view that if you’re on an arts board you have to give. I don’t think everyone has to give the same, but everyone has to be able to give what they can afford to give and every dollar donated is appreciated by the whole team,” says Jonathan Feder, the current Chair of the MTC Foundation, and Board Member, MTC. “I don’t understand how you could go out to a donor – someone who you know – and say, ‘Can you then donate to my company?’ when you haven’t put your hand in your pocket at all,” he says. “[If] you’ve got the leadership, everyone comes along for the journey.”
Recommendations from the report
Having reviewed survey responses, alongside the practices of organisations demonstrating strong fundraising leadership, the research led to a number of recommendations:
Secure agreement from the Chair (and board), CEO and HoF on the importance of fundraising leadership within your organisation and the different roles leaders can play.
Build a shared understanding of how and where leadership can engage in fundraising, as appropriate to their role and consistent with fundraising strategy, to achieve greatest impact for your organisation.
Enable fundraising leadership performance with consistent expectations, compelling communication, transparent reporting against impact measures and by establishing philanthropic cultural norms.
Invest in capacity building (training, peer mentoring and executive coaching) to build collective performance and effective fundraising leadership teams.
Encourage engagement in giving among your staff, starting with board directors, executives and fundraisers. The more people who engage with giving, the more normalised giving and fundraising becomes within your organisation. A culture of personal giving enables greater numbers of people to engage with the power of philanthropy, regardless of their financial circumstances.
Fundamentally, increasing leadership involvement in fundraising often involves difficult conversations about responsibility, accountability, money, personal networks and skills gaps across traditional power structures and hierarchies. If your organisation is prepared to have these conversations, the difference they make could be worth millions.
To read Noble Ambition’s report in full, click here.