A reader wrote:
We are a new non-profit, with a mission to promote health and wellness. We will likely be able to obtain a BCBS grant, but we’re now hearing that we must get board approval prior to its writing so that the board can approve the budget. Is this common practice?
Our response:
The board has authority/responsibility for all fiscal matters, and must approve the organizational budget.
Since it is a fiscal and policy matter, the board must agree to the submission of all grant proposals. They can examine/decide on every proposal, give blanket approval for categories of proposals, or they can be somewhere in between.
Most foundations require/expect/assume that the NPO’s board agrees to what is being committed to by the organization. The assumption is also that the board will accept responsibility for the proper use of the funds and the follow up reporting.
A board, in making policy, must decide whether it will oversee the implementation of all aspects of the program/activity to be financed by a grant (very unusual), or if they will leave that oversight to the executive director (usual). In any case, the board should require that the executive director provide periodic fiscal reports.
A follow up question from the reader:
We’re currently working on writing the BC/BS grant proposal, but we did submit five others previously. Main issues are that there is no policy in place or listed in the by-laws, each board member is trying to state what we should do, and the grant application is due this Friday.
We responded
Individual Board Members, unless specifically given the authority by the board (as noted in the board minutes), have no say about the structure/elements of a grant proposal. Only the Board has grant approval authority … and the board minutes must reflect their approval.
Without that, staff members would be taking “unauthorized” action and would become legally responsible for any claims the grantor might make !!
I can’t conceive of any grantor, especially one the size of BC/BS, accepting a proposal that wasn’t approved by the board of an organization requesting funding.
Be Careful !!
The reader’s final comments:
As said, it’s a green board and they need money, but there are some internal struggles. They’ve just hired a CEO, who wouldn’t be the program coordinator, as she doesn’t have the skill set. There is so much bickering, and the grant is still in proposal-writing mode. Now I understand why so many nonprofit employees just go to work, then go home, and “don’t want to get involved.”
My wording was intended to indicate that the CEO could oversee the financial aspects of a grant-funded program and/or the implementation of such a program. That, too, is up to the board.
What you’ve described sounds very much like so many other new NPOs.
And, a final observation: There may be many employees of (disorganized/unorganized) nonprofits who “don’t want to get involved,” but the majority of NPO staff members have a connection, a commitment, to their organization’s mission and the people being served.
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Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at AskHank@Major-Capital-Giving.com
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Hank Lewis with Development Consultant Associates has over thirty years as a fundraising consultant and is a specialist in Board and Leadership Development, Capital Campaign, Bequest Program and Major Gifts.