Financial stability is essential to the organization’s ability to carry out its services and programs according to the mission. When we think of financial stability, we often think of grants, donations, or even pay-for services. While all these options offer a way to create financial stability, there is one option that most grassroots organizations do not include, and that is the 501(c)(3) Board of Directors contribute.
So, let’s answer the question; should the board of directors for a 501(c)(3) contribute financially to the organization? The short answer is YES. Although the nonprofit Board of Directors are volunteers, they need to show support to the organization, and here are a few reasons why:
Demonstrates Commitment
When the Board of Directors contributes to the nonprofit organization, it shows a personal commitment to the services and programs of the mission, provides a positive example for those working with the organization, and shows donors and stakeholders that the organization is worth supporting.
Financial Support
Regarding funding, donors and grantors look to support programs or services that directly interact with and impact the community. This includes activities such as STEM programs, financial literacy, reading, sports, and more. Although support for the programs is needed, so is a reliable source of income that covers operational costs such as rent and utilities. These costs are often handled by the organization and some of that funding is from the Board of Directors’ contributions.
Leverage for Fundraising
Board of Directors contributions become leverage for funding as it demonstrates the board is financially invested, which can be a persuasive point when seeking external funding. It shows full financial support from leadership and can build trust among the supporters.
Enhanced Accountability
With the Board of Directors contributing financially, it becomes a motivator for accountability and active engagement in governance, oversight, and fundraising efforts.
Operational Stability
The Board of Directors’ contributions can help ensure a basic level of financial stability, providing a cushion during lean times or when fundraising targets are not met, thus enabling the organization to continue its operations without significant disruptions.
In conclusion, the board playing an active role in contributing to the organization has many benefits, including handling the costs of keeping “the doors open” and “filling in the gap” for program and service financial stability. It can also attract donors and stakeholders while setting a great example for staff and supporters.
As consultants, BryteBridge Nonprofit Solutions is here to help you navigate this journey and unlock your nonprofit’s full potential. For more information, join BryteBridge Connect Membership for Live Bootcamps, Webinars, and classes. Speak to a BryteBridge Consultant today by calling 877-857-9002.
