An interesting post and conversation at Tactical Philanthropy wonders out loud whether donors should get to vote for nonprofit board members, much as shareholders get to vote in publicly traded for-profits (discovered through Donor Power Blog). The premise is that a proxy vote, and a real say in the organization’s governance structure, would lead to greater engagement and a sense of ownership.
Beyond the complexity of allocating such a voting privilege (Is there a minimum gift? Is the proxy power based on percentage of overall income contributed? Is there a cost to managing such a vote that would consume a large percentage of the funds contributed?), the conversation misses one essential truth: donors already vote for the strategy and outcome goals of a nonprofit, just as consumers vote for products or services with their discretionary income.
While the marketplace for philanthropic cash and capital works by different rules than the commercial marketplace, it’s still a market. Nonprofits compete for attention, favorable policy, and charitable gifts. Those organizations that connect over time with compelling narrative, results, and connections will get more contributions. Those who disconnect or cannot effectively tell their stories will eventually lose those contributions. (To be fair, Sean at Tactical Philanthropy is already aware of this truth…it just doesn’t show up in this particular conversation.)
If a nonprofit is not creating a sense of ownership, responsibility, and connection among its donors, and its other essential constituents, it has problems larger than a change in voting rights can resolve.