The Australian Centre for Philanthropy and Nonprofit Studies, qut
Chapter 14: Nonprofit CEOs Katie McDonald
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- International context
- Australian context
- Key issues and emerging trends
- Nonprofit governance — engaging boards around fundraising
- Broader culture of philanthropy
- References
Chapter 14: Nonprofit CEOsKatie McDonaldThe Australian Centre for Philanthropy and Nonprofit Studies, Queensland University of Technology Theories and key authorsLiterature on the role of nonprofit organisations’ (NPOs’) Chief Executive Officers (CEOs) in facilitating giving and volunteering in Australia typically draws on the fields of fundraising, nonprofit/organisational management, transformational leadership and volunteer management. Key authors within the Australian context include Wendy Scaife, Katie McDonald, Alexandra Williamson, Marie Crittall and Margaret Scott from the Queensland University of Technology. Internationally, the Leading with Intent report compiled by BoardSource (2015) is a valuable resource as is the study on Challenges Facing Nonprofit Fundraising in the United States (US) by Bell and Cornelius (2013).
The CEO is the ‘Chief Architect’ in establishing a philanthropic culture within an organisation, where every individual staff member, volunteer and board member is engaged with the organisation’s philanthropic goals (Hall 2005). This involves commitment, alignment, prioritisation and investment in fundraising capacity (Bell and Cornelius 2013). The CEO must play the role of champion in order to ensure fundraising is at the heart of the organisation. Despite the importance of a philanthropic organisational culture many US NPOs still struggle to achieve this. In a recent study on Challenges Facing Nonprofit Fundraising in the US, Bell and Cornelius (2013) found some 41% of NPOs reported having no culture of philanthropy. The same study found divergent perspectives between CEOs and the head of fundraising. In particular, 20% of CEOs ‘strongly agreed’ that a culture of philanthropy was in place at their organisations, compared to 12% of fundraising heads, suggesting that CEOs may not be fully in touch with their organisational culture or that there may be different expectations around what actually constitutes a culture of philanthropy (Bell and Cornelius 2013). Furthermore, some 23% of NPOs reportedly lack basic fundraising systems and plans and a further 21% have no fundraising database (Bell and Cornelius 2013). One aspect of facilitating a culture of philanthropy includes engaging the board to ensure they understand and accept their roles and responsibilities around fundraising, which may include accessing networks to create opportunities, making connections, or asking for contributions (Brown and Guo 2010; DeWitt 2012; Herrmann 2011; Iecovich 2004; Wagner 1994). Yet some 25% of NPOs in the US have no board fundraising committee and 17% of boards do not engage in fundraising at all (Bell and Cornelius 2013). Indeed, nonprofit boards consistently score poorly in terms of fundraising effectiveness. A recent evaluation of nonprofit board practices in the US found that fundraising is the biggest challenge that boards face and the number one area for improvement (BoardSource 2015). It is also recognised that the CEO must lead by example and play a direct role in fundraising, especially when it comes to soliciting major gifts. Typically it is up to the CEO to ask for money (DeWitt 2012). According to Farr (2004), nonprofit CEOs in the US spend half of their time on fundraising activities. Major donors have an expectation to meet the CEO as the face of the organisation and embodiment of organisational vision (DeWitt 2012; Hall 2005). The CEO needs to be comfortable with and committed to playing this role. However, this is not necessarily a given, as CEOs are seldom recruited for their fundraising experience (DeWitt 2012). Indeed, although 79% of nonprofit executives in the US agree on the importance of competency in securing gifts, 26% reported that they lack the skills and knowledge to do so (Bell and Cornelius 2013).
The centrality of the CEO for fundraising emerged from qualitative research during the first Giving Australia project in 2005, in particular the need for strong leadership and strategic fundraising was highlighted by NPOnonprofit participants (ACOSS 2005). This is supported by more recent research, which has also highlighted the need for leadership and commitment for fundraising success, as ‘fundraising doesn't happen if you don't have strong leadership’ (Scaife, Crittall and McDonald 2015). Good fundraising CEOs enable the fundraising function in their organisation by building a culture of philanthropy, good resourcing (investing in people and systems) and personal engagement in fundraising activities (Scaife, Williamson and McDonald 2013). Yet fundraising and resourcing of fundraising are not seen as areas of capability for many local CEOs and boards, often due to a lack of training or prior experience (Scaife, McDonald and Smyllie 2011). Establishing a culture of fundraising within an organisation requires that the CEO must bring all staff on the journey (Scaife, Crittall and McDonald 2015). This lends weight to the old adage that ‘fundraising is an attitude not a department’ (Scaife and Madden 2006, 8). But it starts with the CEO: ‘it’s definitely the CEO, if [s]he doesn’t understand what fundraising is, the rest of the organisation wouldn’t either’ (Scaife, Williamson and McDonald 2013, 16). Australian research also highlights the critical role the CEO plays in engaging the board around fundraising. Board members need to be given the tools and understanding to fundraise successfully, and to monitor organisational fundraising activities (Scaife, Williamson and McDonald 2013). Yet research suggests that board members in Australia may be even more reluctant than their US counterparts to engage in fundraising and may require significant shifts in many instances to understand their role. The CEO must facilitate these shifts through education and, in some cases, attrition (Scaife, Crittall and McDonald 2015). For the majority of Australian board members fundraising was not mentioned at recruitment, nor did they receive any fundraising training on joining the board (Scaife, Williamson and McDonald 2013). As in the US, it is acknowledged in Australian literature that CEOs play an especially important role in soliciting major gifts. Scott (2014a, 119) found that ‘the CEO must be involved in fundraising’: ‘If the CEO is not committed to fundraising it won't happen’. This requires setting aside time for fundraising, which can be difficult on top of the day-to-day organisational management activities (Scaife, Crittall and McDonald 2015). Indeed, Australian CEOs reportedly spend about 24% of their working time on fundraising, less than their US counterparts (Scaife, Williamson and McDonald 2013). Fundraisers and CEOs in Australia appear to be the key ‘askers’ when their organisations seek funding, as such they need to know how to ask and what to say in response (Scaife, Crittall and McDonald 2015). Despite strong recognition of the centrality of the CEO in fundraising, research has found significant gaps in Australian NPO CEOs’ capacity to fulfil this role. The major challenges identified include a lack of time and resources and understanding of fundraising (Scaife, Crittall and McDonald 2015; Scaife and Madden 2006).
Training and developmentThe research highlighted a distinct lack of training and development opportunities for Australian fundraising staff and CEOs who wish to improve their knowledge and skills in the area. Professional development opportunities must be available in order to address the fundraising knowledge deficit among CEOs and board members, and to ensure there is a pool of qualified fundraisers to recruit from (Scaife, Williamson and McDonald 2013, 2014). Nonprofit governance — engaging boards around fundraisingWhile the literature confirms the important role that board members play in fundraising, this does not necessarily reflect current practice within the sector. CEOs are uniquely positioned to engage and educate boards about fundraising. Broader culture of philanthropyCEOs who accept their role in fostering cultures of philanthropy within their organisations can also play a broader leadership role in the nonprofit and community sector to encourage giving and volunteering in Australia by celebrating giving and volunteering, and encouraging their major donors to make their gifts public (Scaife, Crittall and McDonald 2015). ReferencesACOSS. 2005. Giving Australia: Research on Philanthropy in Australia: Summary of findings. Canberra: Prime Minister's Business Community Partnership, Department of Family and Community Services, Australian Government. http://www.ourcommunity.com.au/files/GivingAustraliaSummary.pdf. Anderson, Loren J. 1996. "Developing institutional resources: A CEO's perspective." New Directions for Philanthropic Fundraising 1996 (14): 117-124. doi: 10.1002/pf.41219961411. Bell, Jeanne and Marla Cornelius. 2013. UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising. San Francisco, CA: CompassPoint Nonprofit Services and the Evelyn and Walter Haas, Jr. Fund. https://www.compasspoint.org/sites/default/files/documents/UnderDeveloped_CompassPoint_HaasJrFund_January%202013.pdf. BoardSource. 2015. Leading with Intent: A National Index of Nonprofit Board Practices. Washington DC: BoardSource. https://boardsource.org/eweb/pdf/LWI-Report.pdf. Brown, William A. and Chao Guo. 2010. "Exploring the Key Roles for Nonprofit Boards." Nonprofit and Voluntary Sector Quarterly 39 (3): 536-546. doi: 10.1177/0899764009334588. DeWitt, Brydon M. 2012. The nonprofit development companion: A workbook for fundraising success: Wiley Online Library. doi: 10.1002/9781118386255. Farr, Lona M. 2004. "Helping board members understand their roles." New Directions for Philanthropic Fundraising 2004 (44): 105-125. doi: 10.1002/pf.66. Hall, Frank R. 2005. "The fundraising CEO." New Directions for Philanthropic Fundraising Autumn 2005: 43-50. doi: 10.1002/pf.115. Herrmann, Siegfried. 2011. A Strategic Approach to Board Involvement in Financial Resource Development. http://eric.ed.gov/?id=ED526316. Iecovich, Esther. 2004. "Responsibilities and roles of boards in nonprofit organizations: The Israeli case." Nonprofit Management and Leadership 15 (1): 5-24. doi: 10.1002/nml.50. Scaife, Wendy, Marie Crittall and Katie McDonald. 2015. Pivotal people, pivotal journeys: Interim report on the impact of a fundraising study tour on CEOs and their organisations. Brisbane, Queensland: The Australian Centre for Philanthropy and Nonprofit Studies, Queensland University of Technology. http://eprints.qut.edu.au/87409/. Scaife, Wendy and Kym Madden. 2006. "Change agents or counting the change: Insights to the role of fundraisers in Australian society and issues facing their professionalisation." Paper presented at the Social Change in the 21st Century Conference, Carseldine, Brisbane, 27 October, 2006. Centre for Social Change Research, Queensland University of Technology. http://eprints.qut.edu.au/5986/1/5986.pdf. Scaife, Wendy, Katie McDonald and Sue Smyllie. 2011. A Transformational Role: Donor and charity perspectives on major giving in Australia. Brisbane, Queensland: The Australian Centre for Philanthropy and Nonprofit Studies, Queesland University of Technology. http://eprints.qut.edu.au/40336/. Scaife, Wendy, Alexandra Williamson and Katie McDonald. 2013. Who's asking for what? Fundraising and leadership in Australian nonprofits. Brisbane, Queensland: The Australian Centre for Philanthropy and Nonprofit Studies, Queensland University of Technology. http://eprints.qut.edu.au/59196/. Scaife, Wendy, Alexandra Williamson and Katie McDonald. 2014. "Mind the Gap!: Fundraisers and their nonprofit organisational leaders do think differently and this difference matters." Paper presented at the Australian and New Zealand Third Sector Research 14th Biennial Conference, Christchurch, New Zealand. Scott, Margaret Ann. 2014. "Organisational factors that drive fundraising effectiveness in Australian health charities." Master of Business (Research), The Australian Centre for Philanthropy and Nonprofit Studies, School of Accountancy, Queensland University of Technology. http://eprints.qut.edu.au/74880/1/Margaret_Scott_Thesis.pdf. Wagner, Lilya. 1994. "The road least traveled: Board roles in fundraising." New Directions for Philanthropic Fundraising 1994 (4): 33-47. doi: 10.1002/pf.41219940405. Weinstein, Stanley. 2004. "Transformational leadership and the resource development professional." New Directions for Philanthropic Fundraising 2004 (44): 5-55. doi: 10.1002/pf.63. 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