Disengaged board members. Board member engagement-both in terms of expertise and monetary support-is one of the most important ingredients for organizational success. The people on a board matter. As a group, they need to have the right mix of knowledge and skills to guide an organization. As individuals, they should have networks with deep pockets that they can turn to for fund-raising. One of the problems that plagued the board of the YWCA was that members didn't have the resources to write big checks. In addition, board members should be well aware of an organization's financial situation; a functioning board will assist in developing the annual budget and ensure that proper financial controls are in place. It will also help the organization develop contingency plans in the face of both great success and hardship.
Examining the indicators outlined above can help your clients spot a potentially risky philanthropic investment. Advisors who understand how to evaluate recipient organizations not only provide better services to their clients, but also open up new opportunities within their own advisory practices.
In the next issue, we'll discuss how advisors can help their clients discern which organizations will make the most of their charitable dollars.
Mollie Bunis is an advisor and Meg Lassar is an analyst with Strategic Philanthropy Ltd., a Chicago-based global philanthropic advisory practice serving clients worldwide.