Nonprofit Leadership: Making a Difference

ACTimBoldingAwardOur 21 years of experience have taught us that when you invest in building great nonprofit leadership, you invest in building a stronger community.  Effective leaders not only make a difference in their own organizations but also in the communities and the people they serve.  As Ronald Heifetz and Marty Linsky said in their book, Leadership on the Line, “Exercising leadership is a way of giving meaning to your life by contributing to the lives of others.”

Over the years, the Alliance has recognized ten defining characteristics of strong leaders:

  • A passion for the cause and the ability to keep the organization focused on advancing its mission, always looking at the bigger picture.
  • An inspiring motivator, encouraging others to be the best they can be at accomplishing their work.
  • Analytical, objective and strategic, with the ability to step back from a situation and make rational decisions based on fact and free of bias.
  • Honest, humble and willing to listen to employees at all levels of the organization.
  • Courageous, tenacious, and patient, not afraid to stand alone, succumb to pressure and keep moving forward toward the organization’s goals.
  • Responsible—the first to accept the blame and the first to spread the accolades.
  • Relationship builder, embracing the idea of a networked nonprofit, letting the world in as fully engaged partners.
  • Articulate in communicating both internally and externally.
  • Adaptive to the environment, challenging long-held beliefs, embracing learning and risk taking as fundamental competencies.
  • A focus on impact and outcomes.

At our eighth annual conference on May 1st, it was the Alliance’s distinct honor to recognize a Mid-South nonprofit leader who exemplifies these characteristics. Tim Bolding, Executive Director of United Housing, was presented our first Excellence in Nonprofit Leadership award for his passion, tenacity and continuous efforts to champion affordable housing in Memphis for more than 30 years.  Tim works everyday to make United Housing the best it can be at serving its clients and closely follows his own rules of leadership – check your ego at the door, being right is irrelevant and take what you have to make what you need to get what you want.

Beginning his career as an intern in the Shelby County Office of Intergovernmental Relations, Tim took the initiative to write a grant that led to the creation of the county’s first Department of Housing.  After serving as the department’s first administrator for a number of years, he became the Executive Director of the Memphis Multibank Community Development Corporation and oversaw the development of a United Way grant, which initially funded United Housing.  Under Tim’s leadership the past 18 years, United Housing has counseled more than 6,800 individuals and families and facilitated the purchase of more than 2,500 homes in Memphis and ShelbyCounty.

United Housing is a graduate of the Alliance’s Program for Nonprofit Excellence.  Upon entering the program, Tim is remembered as saying that he had no interest in working with or partnering with other organizations—it was just too much trouble.  Going through the PNE process, Tim recognized the importance of being a networked organization. Over the past ten years, he has helped to spearhead numerous partnerships in the Memphis community and across the state of Tennessee, which have included both nonprofit and for-profit partners. These partnerships have had a collective impact of over $300 million in housing development in our community.

What qualities do you think make someone a strong leader?  Tell us what you think in the comments section below.

Board Engagement: The Most Unorthodox Development Committee Meeting Ever


Reprinted with permission from Creation in Common. Originally posted May 28, 2013.

“This will be the most unorthodox development committee meeting you have ever attended” promised Tom, the committee chair. Admittedly, I was skeptical, yet the energy in the room was palpable as more and more committee members stuffed themselves into the tiny, clown-car-like space, where we were meeting. While the need for the organization’s services had grown significantly, the development effort, though robust, had remained relatively flat over the last five years. This group of people committed themselves to find a way to take their work to the next level.

The board/volunteer development committee has the difficult job of generating high performance while overcoming significant negative stereotypes about fundraising. Endemic to many failed efforts is a misunderstanding about what is needed from the committee. Often we think about it in terms of more influence, better contacts, and deeper pockets. These are important, but these are the outcomes not solutions to building an effective development program. By chasing these, committee members put themselves in a very unproductive position — reacting to each others ideas, hoping that someone will discover the secret that will make asking their friends for money less painful.

What I appreciated most about Tom’s “unorthodox development committee meeting” was that this group of people had moved beyond reacting to each other’s ideas before they walked through the door. For the last few months, the committee has ruminated over reams of data about the organization’s past fundraising performance– understanding the structure of the program, the kind of results it has generated, how it cultivates new donor prospects and how it impacts the donor relationship. More importantly, they were able to dispel several assumptions creating a clear picture about their situation. Now, they were ready to begin the discussion about what a redesigned effort might look like.

According to organizational learning guru Peter Senge, “understanding the creative process is the foundation of genuine mastery.” Yet, he goes on to say, “muddling through is the strategy that characterizes most of us.” For the development committee to work (or any board committee for that matter), we need to embrace the creative process by utilizing the skills and expertise around the table to assess situations, broaden perceptions, and surface deep assumptions. From there we can take action on a fresh perspectives that will give way to strategies rooted deeply in the committee’s beliefs and collective thinking. This will lead to building new activities and processes and ultimately develop new structures and practices that will maintain the effort.

Key to the creative process is a deepening of commitment. When development committee members react to each other, there is no skin in the game. Ideas are a dime a dozen. But when members delve into the issues, examine assumptions, and discuss new solutions, they are also sharing their passions, beliefs, and desires for the organization. As the committee seeks a solution, the individual member is expressing why they are there and the group must navigate its way through these different perspectives synthesizing them into a shared vision forward.

After introductions in the small cramped room, Tom had us get up and walk next door into a larger open space and there we worked individually and in teams to explore the organization’s situation and identify potential strategies. It was not the large room, the paper on the wall, or the collaborative brainstorming that made this meeting “unorthodox.” It was that this committee was ready and energized to go to the next level, and at the end of the meeting more committed than when they started to continue on their creative journey.

Executive Coaching, An Essential Leadership Development Tool for Today’s Business Landscape


Guest Contributor: Sonja Mustiful, Essence of Coaching LLC, Alliance Consultant

Executive Coaching is the active and collaborative participation of both the coach and the client. Coaching helps the client leverage their strengths, with a deliberate focus on first identifying and assessing their professional development needs and then helping clients make specific behavioral changes resulting in a more effective leader.

In my work as an executive coach, I meet at least twice a month with each of my coaching clients.  I often talk to them in person, on the phone and exchange emails with them as we work on their real-time business challenges. It is completely confidential giving the client an opportunity to share personal concerns while gaining an external perspective.

Executive Coaching focuses on what it is that you need to do to facilitate the change you desire. This is why organizations are increasingly enlisting the services of certified executive coaches. It is about identifying and clarifying your concerns, enhancing effective action, building capabilities and practicing new behaviors. It is about eliminating things that are not working and establishing boundaries. Coaching helps clarify personal and professional goals and identify ineffective attitudes or blind spots that may be detracting from otherwise exceptional performance.

The client process of Executive Coaching addresses where you are today and where you would like to be in the future. It is forward-looking and action-oriented.  Coaching is more than a quick fix. It may be necessary to look at a number of variables including how you are perceived by your peers; how you prefer to interact with others; how you make decisions; your strengths and weaknesses; your management, conflict resolution style and your communications patterns.

Executive Coaching focuses on five key areas: 1) understanding your Leadership Style; 2) assisting in assessing your core values and life mission (if desired); 3) focusing in on what you want to achieve; 4) taking responsibility for your actions and implementing change; 5) increasing your skill levels.

An executive coach is able to objectively provide a supportive mechanism for making realistic progress by giving feedback, helping clients increase their confidence in new situations and holding clients accountable to their development plans.

The Alliance for Nonprofit Excellence invites you to read an interview with author Bill Ryan about his study, “Coaching Practices and Prospects: The Flexible Leadership Awards Program in Context”.  The interview was originally published by The Nonprofit Quarterly on May 14, 2013.

Is crowdfunding an option for your nonprofit?

Crowdfunding, a means of getting people to pool their money to raise capital, is no longer just for business startups and artists. Sites like, CauseVox and Fundly now attract hundreds of nonprofits raising money for their causes.

Crowdfunding was inspired by crowdsourcing—networking to build collective cooperation and trust for a shared effort. Crowdfunding has long been a popular model for disaster relief, international microenterprise, and political campaigns.

But with the rise of social media, opportunities are soaring for nonprofits to crowdfund to raise dollars and visibility. Even sites like Kickstarter and indiegogo, which aren’t non-profit specific, are used more and more for organizational fundraising.

Crowdfunding sites let your nonprofit set up an online campaign based on a fundraising page, and you can accept funds directly from that page using the website’s credit card processor. The sites are designed so supporters can get their colleagues and friends to donate too, either by setting up their own fundraising pages or those that link to your “master” campaign page.

Some sites like Kickstarter are geared more toward tangible products like films and art exhibitions, and their nonprofit users tend to be arts organizations promoting such products. Others, like CauseVox, are more broadly geared toward nonprofits. But all crowdfunding sites work best for specific projects or campaigns, rather than general fundraising such as annual giving.

But crowdfunding is not a magic cure for all fundraising woes. It takes strategic effort to get traction on your campaign from your inner circle of supporters, and to create the compelling messages that will spread the word beyond that circle. The sites provide you with the tools to report and thank donors, but someone needs to manage the process. And crowdfunding works best for quick turnarounds—the money comes in and you need to use it for what you promised, without delay.

Crowdfunding sites vary in costs and features. Make sure you choose one that’s visually appealing, easy to use, and fits your needs. For instance, some sites like KickStarter require a video, while you only need pictures for others like Check out the total cost of the fundraising platform—some have set-up fees, monthly fees, credit card processing fees, fees for sending you a check, etc. Don’t forget to investigate what payment methods donors can use, including e-checks.

Also look at the actual networking capabilities. How easy will it be to link to and promote your fundraising page on social networking sites?  Can your supporters set up their own pages and have donations funneled through them back to you?

Most importantly, check out the site’s stats and success stories, and ask around. There are more crowdfunding sites hitting the web every day, but not all of them are widely attracting people to browse for causes and make donations. Pick a site that people are using!

You’ll learn much more about crowdfunding and its potential for your nonprofit, the Alliance’s upcoming conference Powerful Networks: Nonprofits, Social Media, & Community in just a week—register now! 

Fundraising in the cloud

Is your fundraising management in the cloud?

Cloud computing refers to applications and resources you use through the Internet, like Webmail. These are hosted and run by servers connected to the net–servers you don’t have to host or support.

Fundraising in the cloud has taken off in the last few years, with nonprofits using cloud-based customer relationship management (CRM) systems to find and manage donors. CRM applications that run in the cloud are the cheapest, safest, and most efficient way to streamline fundraising operations so that all your information is accurate, up-to-date, and smoothly integrated with your fundraising operations.

The Alliance is excited to welcome Tal Frankfurt from Cloud for Good to this year’s annual conference. Cloud for Good is a Memphis-based national consulting firm that helps nonprofits create strategic cloud-based solutions, including CRM. Frankfurt will present on how to use CRM databases to build fundraising capacity and get better results from your efforts.

Cloud for Good specializes in helping nonprofits implement SalesForce,  a CRM system that offers a version for nonprofits to track constituents, partners, donors and their donations, activities, volunteers, and more. SalsaLabs/Democracy In Action is another option, mostly for small organizations focused on social change. Many other systems are available, and customizable, for all kinds of nonprofits.

CRM can help your nonprofit target potential donors, establish plans for contacting them (not too much or too little), and convert them into actual donors. CRM systems keep track of all your conversations, interactions, and results. They help you develop channels for crafting specialized messages for different audiences, and for engaging people to do more—call their Senators, attend an event, read your new report. They tie into your website and link to social media avenues like Facebook and Twitter to help increase the reach of your efforts. They provide extensive analytical capabilities—you can chart the success rate of your campaigns and learn what worked and what didn’t. And they allow everyone in your organization to access a unified, continually updated view of donors and potential donors.

Have a recommendation for a CRM system you use and like? Want to know more about working smarter and faster through CRM in the cloud? Don’t miss our annual conference on May 2–register now!

The dark side of social media

A few weeks ago, a blogger who posted defamatory comments about a local landfill owner on the website of New Orleans’ Times-Picayune newspaper was revealed to be a Federal prosecutor. In December, three young Congressional aides decided to get drunk at the office every day and tweet about it, not as anonymously as they—or their boss, Representative Rick Larsen–might have hoped. Last winter a staffer at the Red Cross slipped up, accidentally alerting the organization’s Twitter followers that he was about to get “slizzerd” on expensive beer.

As nonprofits that raise money and rally support online, we’re generally focused on the benefits of social networks. But what about the risks? The cloak of online anonymity can easily be raised, and lines between business and pleasure accidentally crossed. It shouldn’t come as a surprise that law firms specializing in social media law are on the rise.

You can’t completely protect yourself from the dark side of social media, but you can minimize the chance that a disgruntled or careless employee will damage your nonprofit’s reputation. (Or worse, lead to a libel or harassment lawsuit.) A social media policy is a good place to start. What to think about if you don’t already have one?

1. Understand and communicate the importance of the policy. For example, employees should know that information posted in social media can be used as evidence in a court of law. Also, actions taken by employees can be held against an employer, on the clock or off. And you might also remind your staff that there’s really no such thing as “anonymous”—deleted data can almost always be recovered using cyber forensic tools.

2. Require that personal postings be carefully distinguished from those of your organization, such as by using a disclaimer that the views and opinions expressed do not represent those of your organization. Also require employees to conduct official business only through the organization’s social media accounts and ensure that the organization’s accounts should not be used for personal affairs. Although employees may share your organizational positions and agenda, they should avoid even the perception that they’re speaking on behalf of your organization in unofficial communication.

3. Make ownership of your social media accounts explicit. Cases are on the rise in which employees leave an organization and take valuable social media content and contacts with them, resulting in disputes over who “owns” this information. Avoid confusion by clarifying that Twitter followers, Facebook friends, and other online contacts generated through your organization’s work belong solely to your organization.

3. Make clear that what’s illegal in the real world is also illegal in the virtual world. Your policy should prohibit:

  • Mishandling of intellectual property (with regard to both protecting yours and infringing on others’.)
  • Discriminatory statements, racial slurs, and sexual innuendo that can lead to hostile work environment and harassment claims.
  • Political campaign activity attributed to your organization, which can endanger your 501(c)(3) status.
  • Improper disclosure of confidential or proprietary information. If an employee blogs or posts information about a donor or constituent, she shouldn’t reveal any personally identifiable information about that person without authorization.

4. Make sure your social media fundraising complies with charitable solicitations laws. Most states require registration for nonprofits that solicit funds within their jurisdiction. In some states, just having a “Donate Now” button can trigger the registration requirement, as can social media fundraising activities. If your fundraising targets people who live in other states, be aware you are subject to their requirements as well as those where your organization is located.

5. Do not impose a draconian, unrealistic social media policy. Many organizations have tried to impose all-out bans on social media to avoid the risks, and have found themselves on the losing side of a lawsuit. Your policy should govern the prudent use of social media, not prohibit employees from participating. It should provide guidance on what employees can and cannot do in social media, both in their role as employees and in their personal use, and fit the mission, culture, and needs of your organization.

Got questions about social media? Get May 2 on your calendar and register for our annual conference! We look forward to seeing you at Powerful Networks: Nonprofits, Social Media, & Community, with some of the country’s leading voices in the field.

Make way for mobile purchasing

Have you bought coffee on your mobile phone yet?

Mobile phone payment systems have been around for almost three years, and Starbucks was one of a few large retailers to pilot the technology.

Now PayPal has launched its mobile payment program Paypal Here, signaling that phone payments have gone mainstream. Not only will we be buying more lattes by phone, but more nonprofit goods and services, including workshop fees, concert tickets, and festival tee shirts.

Nonprofits have begun using mobile platforms so that supporters and customers can make payments on the go. The Girl Scouts tried out mobile payments for cookie sales this year, and the Salvation Army used the technology for holiday donations.  A handful of farmers’ markets are piloting mobile sales, and several savvy museums and concert halls now offer the option.

Mobile payment companies like Square and LevelUp have been around a few years, but Paypal Here is expected to take the technology to the masses. The Paypal Here app can be used to accept any credit card or debit card, as well as cash, checks, and, of course, Paypal. Merchants get a plastic dongle that attaches to the phone through the headphone jack and acts as a reader. They can also use the iPhone camera to read the credit card, and the system can generate electronic invoices.

PayPal Here will charge a flat 2.7% rate for swiped cards and PayPal transactions and 3.5% plus $.15 for key-in and scan-in card transactions. Sending electronic invoices and scanning checks will be free.

Both Square and LevelUp have been used by nonprofits for donations, auctions, and other events. LevelUp works like the Starbucks mobile payments system–after you sign up and input a credit card number, you get a unique code that can either be scanned by a smartphone or waved in front of a terminal. Square, which has a card reader like the forthcoming Paypal service, is the most popular option for nonprofits. With these services, geotracking confirms customers’ locations, so they don’t even have to even take out their phones.  Intuit GoPayment uses the same technology, and helped Girl Scout Troops in Ohio increase cookie sales by 13 percent.

Are you using mobile payments in your nonprofit? Let us know, we’d love to hear how it’s working for you.

Social media needs social strategies

“Successful social strategies (1) reduce costs or increase customers’ willingness to pay (2) by helping people establish or strengthen relationships (3) if they do free work on a company’s behalf.”

–Misiek Piskorski, Harvard Business       Review, November 2011

How would you feel if you were at a dinner party with friends and a stranger sat down next to you and asked, “Hey, can I sell you something?”

That’s how many companies use social media, says Harvard business professor Misiek Piskorski.

In his recent study of 60 for-profit businesses, Piskorski found that companies that performed poorly in online social realms “merely imported their digital strategies into  social environments by broadcasting commercial messages or seeking customer feedback.”

The problem, he says, is that people get involved with social media to connect with other people, not with organizations.

Piskorski’s study shows that companies that devised social strategies to help people build relationships are the ones that found significant returns from their investment in social media.  Returning to the dinner party analogy, these companies ask “May I introduce you to someone or help you develop better friendships?”

Nonprofits face similar social media challenges. We spend precious staff hours on building “friends” and “followers” but are we seeing a real return on the investment?

Nonprofits that use social media to create deeper engagement with their community can generate tremendous benefits. They recruit new allies, strengthen and mobilize support networks, spread information, and raise money.

The potential payoff from social media is the subject of our annual conference this year. We hope you’ll join us May 2 for Powerful Networks: Nonprofits, Social Media, & Community, an exciting day of expert information and practical training to help your organization further its mission with social media.

Piskorski’s work suggests there are four types of effective social strategies for companies:

*Reduce costs by helping people meet.
*Increase willingness to pay by helping people meet.
*Reduce costs by helping people strengthen relationships.
*Increase willingness to pay by helping people strengthen relationships.

Check out the HBR article to understand how companies like Zynga, Yelp, and American Express use these strategies to reap the benefits of social media. And join us at the annual conference to learn how nonprofits can choose social media goals that fit their missions, allocate resources to accomplish these goals, and define and understand their communities.

Endowments, part 3: the campaign

A few weeks ago we discussed the pros and cons of endowments, and last week we touched on the key decisions and policies needed to get an endowment up and running effectively. Today we share some thoughts on running endowment campaigns.

Endowment campaigns are structured like annual campaigns, with specific goals, timelines, and gift charts.  However, they don’t happen every year. Some experts say that five or seven years should be the minimum time between endowment campaigns, and others say ten. They also differ from annual campaigns in that they focus on large givers. Annual campaigns are broad-based, relying on smaller gifts from a lot of donors. In an endowment campaign you might expect half or more of the goal to be raised from just a handful of donors.

So how do you prepare for an endowment campaign?

1. Set a goal. You’ll first need to determine how much interest income you want and the size of the principal needed to generate that much interest. In general, nonprofits can take out up to five percent of the principal each year and still have it continue to grow. A financial advisor can help with projections, and a feasibility study can help set ambitious but realistic goals.

Sometimes an organization will set a goal for their endowment that is higher than what it can raise immediately. Instead  a campaign is conducted to “seed” the endowment fund. For instance, your ultimate goal might be one and a half million dollars, but $500,000 is a more realistic target for an intensive endowment campaign. You continue raising money for your endowment after the campaign, with the hope that having raised the seed will make donors feel more confident that their gift is joining existing funds. The problem, say some experts, is that too often the endowment levels off after the seed is raised, and then the fund is too small to generate the interest really needed. A seed campaign only works with a good follow-up plan!

2. Create a gift range chart. Fundraising gift range charts are based on proven guidelines. For endowment campaigns, you will usually be seeking a lead gift equal to 20 percent of the goal, two gifts that equal ten percent, and three to five gifts that make up the next ten percent. That’s 50 percent of the goal from six to eight donors.

Remember that donors have several years to pay off their gifts—a donor’s pledge of $100,000 may be paid as $2,778 a month or $16,667 twice a year for three years.

3. Establish a timeline. Endowment campaigns usually run from two to five years. If this sounds like a lot, consider that it may take months to do prospect research and develop your written materials. Also, you can expect that soliciting lead donors will take place over several conversations. Experienced fundraisers say that five years is the maximum most nonprofits can sustain interest in the campaign and balance it with other fundraising activities, and that the active part of the campaign is best conducted over two to three years.

4. Develop communications materials. You’ll need a fundraising case in the form of a printed brochure or other documents. Although this may seem like a quick and easy step, a good endowment packet takes time to develop and involves major decisions about content and style as well as design, length, color, etc. Allow plenty of time but also be clear about how and when the decision-making process will take place so your materials don’t get hung up by endless discussion and debate.

5. Form a solicitation team.  Endowments are mostly funded by donors’ assets or estates, not their annual income. Your solicitation team should be comprised of people who are comfortable asking donors for assets. Usually they will be people who have made an asset gift themselves—they will be asking others to join them in funding this endowment. Typically a team of a Board member and staff member will identify a few people who are close to the organization and able to make a large gift. They will solicit gifts from these people and then ask them to be on the solicitation team. The team may start with just two or three donors and build gradually over time.

6. Develop a list of prospects. Prospects are people who demonstrate a commitment to your nonprofit, have money, and to whom you have access. Your list should start with the people who are closest to the organization, including Board members and major donors. You will have to think through this group of people to determine who can give the biggest gifts, and who is most likely to be excited about your endowment. The more you know about your donors and the nature of their gifts, the more likely it is you’ll create a strong prospect list. For instance, if a donor is already giving you regular gifts from her investment income, she may be willing to give you an asset to fund your endowment. A general rule of thumb for endowment campaigns is that you will need about four times as many prospects as the gifts you seek.

 7. Solicit the gifts.  Soliciting endowment gifts is similar to soliciting other large gifts. However, you must articulate and communicate a different kind of need for endowment gifts. Soliciting major gifts depends on communicating a pressing, immediate need to the donor, and capital gift solicitations must convey a specific need for a facility or some other investment. The case for an endowment must express your organization’s need to build long-term stability and convince the donor that her gift will help permanently sustain your mission in the community.

Endowments represent a big responsibility for nonprofits.  Supporters have to do more than just like your organization to be willing to give to your endowment. They must believe your organization can manage investing large amounts of money and that it can steward that money carefully in the future. No matter where you are in the process of preparing for or running your campaign, your most important job is to ensure you’ll do both.

We’d love to know if your organization is planning an endowment campaign now, or if you have lessons learned you’d like to share from past campaigns. Considering an endowment?  Give us a call–we can help you find a great consultant to help you evaluate whether to establish an endowment or to help you organize and operate an endowment campaign.

Steps to starting an endowment

Two week ago we shared our thoughts about what nonprofits should consider before starting an endowment. If you’ve worked through the pros and cons, and your organization plans to start an endowment, how do you get started? Your Board must agree on the role of the endowment, authorize its establishment, and put several essential policies in place. This week, a look at these important steps.

1. Agree on the purpose.  Why does your organization want an endowment? You may be surprised that Board and staff have different ideas about the role an endowment would play. Is it to provide some relief from fundraising? Pay for new programs? Start a satellite office?  What you use it for will help you figure out how big your endowment should be.

2. Authorize the endowment. This is a Board move, signaling its commitment to create the fund and hold the money in perpetuity. The endowment becomes part of their financial responsibility, and will be included as a separate line item in financial reports.

3. Create an endowment policy. You must create a policy that specifies how the interest income from the endowment will be used. The challenge of creating a policy is to make it broad enough to meet your needs without being too vague. Take time to think through the details, and include how the endowment will apply to expected change and growth.

4. Create an invasion policy. It sounds violent, but “invasion” refers to using the endowment principle. You wouldn’t do so unless circumstances are dire or you would be using it to pay for another long-term asset, like a building. Most policies stipulate that the principal can only be used if the organization is in danger of closing. Some Boards rule that the principal can be used to balance the budget for one or two years, and others rule that it can’t be touched at all, ever. It’s also important to detail how much of the principal can be taken and when it must be paid back. Last, invasion policies should specify who has the authority to decide whether to use the endowment principal—the whole Board, a percentage, the executive committee?

5. Develop a gift acceptance policy. You may have a gift acceptance policy in place before you start an endowment. But whether you’re adapting an existing policy or starting fresh, you’ll need to decide what types of gifts you’ll accept, who has the authority to accept them, and under what circumstances. Will you take buildings? Land? Expensive collectibles you may not be able to sell? If you decide to accept stock, are there sectors or companies that you don’t want to support? Complications associated with non-monetary gifts are why some experts recommend nonprofits start with a policy to accept cash, securities, and life insurance only.

The gift acceptance policy is also where you’ll have to explore the possibility of restricted gifts. If someone wants to endow a particular program, what will you do?

6. Establish an investment policy. An investment policy will state whether you’ll invest entirely for income or you’ll have a mix of investments to grow the principal and income. Will you require socially responsible investing, choosing screens to filter out tobacco or gun companies, or those that don’t support unions, for example? And how will you set or rank these priorities?

7. Create an investment committee. Once your endowment is established, your Board should create an investment committee. Non-Board members such as donors can be part of the committee as well. Although the committee manages the fund, the Board must still take responsibility for monitoring it. It’s important to have strong faith in the knowledge and intentions of the committee.

With your endowment authorized and policies in place, you can announce the fund and start including it in your fundraising efforts. You can also conduct an endowment campaign, with specific goals and timelines, which we’ll cover next week.